Libyan Project Reference Document 06-2013-1

HPTSHigh Plains Technical Services, Inc.10905 Rochdale Avenue, Oklahoma City, OK 73114-7624 4209 Fortune Lane, Dallas, TX 75216 20 Horton Street, Kensington W8 4NR, London, England

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HPTS REFERENCE DOCUMENT

Understanding the Synopsis of Contracted Libyan Projects and

The Joint Venture Framework between Renewal Technology Company for General Contracting, LLC (RTCGC, LLC) and High Plains Technical Services, Inc.

(HPTS) for Project Execution also known as RTCGC-HPTS, a Joint Venture.

(This document establishes the required framework for engaging in prospective Libyan projects including but not limited to Housing, Healthcare Facilities, and other projects. Certain section of this document address Housing and Healthcare Facilities specifically, however the content of these those sections are equally applicable to other project types with necessary and sufficient adjustments for those projects specific needs)

I. SECURITY: Are the project sites in locales that are securable? The Libyan government has been unable to protect even its own institutions. As recent as May 2, 2013, the ministries of justice, interior, and foreign affairs have all been besieged by armed militias and the wheels of bureaucracy had ground to a halt. Only adding to overall instability, criminal mafias are also on the rise. At the same time the conflict between the government and militias has escalated, with the latter besieging the ministries of defense, interior, and foreign affairs, demanding the resignation of the ministers and the immediate application of the political isolation law, which is in the process of being debated and voted on. Collectively, these events demonstrate a pronounced political and civil instability in Libya. See relevant information at: A. There is still plenty of low level lawlessness and no confidence can be placed as yet in the new

embryonic army and national police. Arms have not been brought under central control and there are major problems on the borders. http://www.tripolipost.com/articledetail.asp?c=2&i=8951

B. The FDI conference due to take place in London on 29-30 May has been postponed because of the current political crisis in the country. http://www.libyaherald.com/2013/05/10/libya-investment-conference-in-london-postponed-because-of-crisis/

C. Benghazi is awash with weapons and has become a no-go area for foreigners since September's deadly attack on the U.S. diplomatic mission in which the ambassador and three other Americans were killed. http://www.reuters.com/article/2013/05/29/libya-oil-idUSL5N0EA2G020130529

II. CORRUPTION: Corruption appears to remain a major risk to investors and consultants alike For construction contractor the question is having to payoff critical path suppliers and inspectors in order for the construction to proceed. See relevant information at: A. As Maplecrofts new Libya Corruption Risk Briefing (released this week) found, large-scale

corruption became deeply entrenched in Libya under the Gaddafi regime and continues to pose a range of financial, operational and legal challenges to companies operating or investing in the country. http://blog.maplecroft.com/2012/05/22/analysis-corruption-remains-major-risk-to-investors-in-libya/

B. There are extensive business opportunities in Libya for foreign companies even though the country

still faces many challenges including endemic corruption and smuggling which accounts for 40 percent of GDP and is equivalent to the defence budget. This is of great concern to Libyas neighbours and to Libya itself. http://www.tripolipost.com/articledetail.asp?c=2&i=8951

http://www.tripolipost.com/articledetail.asp?c=2&i=8951http://www.libyaherald.com/2013/05/10/libya-investment-conference-in-london-postponed-because-of-crisis/http://www.libyaherald.com/2013/05/10/libya-investment-conference-in-london-postponed-because-of-crisis/http://www.reuters.com/article/2013/05/29/libya-oil-idUSL5N0EA2G020130529http://blog.maplecroft.com/2012/05/22/analysis-corruption-remains-major-risk-to-investors-in-libya/http://blog.maplecroft.com/2012/05/22/analysis-corruption-remains-major-risk-to-investors-in-libya/http://www.tripolipost.com/articledetail.asp?c=2&i=8951

HPTSHigh Plains Technical Services, Inc.


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III. CORPORATE STRUCTURE: In reference to the contents of Amereller document from the link, below; what is the proposed structure of the RTCGC-HPTS, a Joint Venture? See relevant information at:

Foreign companies operating in Libya must set up a registered presence to operate in Libya. Under Libyan law it is not permissible to do business in the country without a registered presence. http://amereller.de/fileadmin/PDFs/ALC_Doing_Business_in_Libya_April_2013.pdf IV. RECONSTRUCTION: The complexity of reconstruction and resources required. Large scale reconstruction efforts demanded significant human capacity with management, coordination and technical skills as well as funding. In the case of massive housing projects to be executed in Developing Countries Master Plans are non-existent, woefully outdated or incorrectly derived. As such design and build budgets can be and usually are optimistic, order of magnitude estimates based on the number of homes desired and then multiplied by budgeted cost per house with only a nominal administrative overhead. Thus, the Projects Resource Plans (PRPs) and Work Breakdown Structures (WBSs) are based upon deficient, knowledge based activity schedules, log-frame analysis or similar; usually at fairly high administrative levels, without taking into account of the range of skills and expertise required and the practicalities in identifying, recruiting or relocating personnel to fulfill key project execution and management roles. First, per the Master Plan, there must be developed Spatial Plans based on detailed surveys that identify specific requirements for environmental protection, enabling works and infrastructure before the construction of housing can occur. Next, per the Master Plan and the project specific Spatial Plan, a clear definition of the Scope Of Work for each construction project must be derived so as to be able, accurately, to estimate the required resources (financial and human) involved, which is tied to overall timescales so that expectations can be managed, while minimizing environmental impacts, hence a project specific Scope of Work based WBS. The Construction Site Preparation is a critical path that is the basis for the sequence of construction and should be closely analyzed for the risks and opportunities associated with the site. Included in this critical path is defining the quality of reconstruction in terms of Beneficiary Acceptability (interim and final acceptance and approvals), as well as engineering Best Management Practices and compliance with Codes, Standards and Governing Authority Regulations. Equally critical is establishing the availability and logistics of the required construction labor, material and equipment and an understanding of local construction practices that directly impact the building design and constructed cost. Construction material requirements will demand considerable funding investments given the probability of very little local production of building materials or components, plant or equipment. At one time Libya lacked diversification in systems and materials for construction. If this still true today this means a complete dependence on masonry-based and/or cement-based materials in lieu of organic materials that may be unsuitable for the dry, arid conditions of the Sahara Desert of Libya. Thus, the probability is high there will be a heavy dependence on imported products that will depend on delivery by way of adequacy/inadequacy of the transportation network. This brings into play the monopolizing, hoarding and other difficulties in procuring and transporting materials from afar and a number of other negative factors, such as high and rising prices for construction products. Also, given Libyas ambitious construction program the demand for skilled labors of all kinds throughout the region will be acute. The resultant output from the Scope of Work will be Project Resource Plans, Work Breakdown Structures, Planned Drawings Lists, Detailed Budget, Risk Register and the Program/Project Management Processes that results in the overall Project Execution Plan.

http://amereller.de/fileadmin/PDFs/ALC_Doing_Business_in_Libya_April_2013.pdf



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The Project Execution Plan is comprised of a Plans, Specification and Estimate package which include the official (hence Client accepted and approved) Site Survey and Site Preparation including the sites existing under/above ground utilities and adjustments/relocations required thereto; and include Site Location, Building Foundations, Building Superstructures and appurtenances set forth in Architectural, Civil, Structural, Mechanical; Electrical; and Piping Drawings at the required drawing scale and layout required for implementation by management and labor. The drawings will contain the material and workmanship specifications, and bills of quantities indicating the amount of materials required. The drawings quality must be legible with the required amount of information translated as one to one from Arabic to English. The Project Execution Plan must contain a comprehensive site location drawing(s) showing the buildings, their surroundings and associated infrastructure. The Site Location drawing(s) must include were key physical constraints, land ownership and responsibilities of the community, the implementing agency and other partners clearly marked and must include specific reference to the Site Survey. Key questions specific to Libyan Project Plans Are there standard designs and specifications or accommodation and equipment schedules? How do standard designs details and construction installations relate or compare to international

standards? Do standard designs need to be modified to meet specific site or functional requirements? Have partnerships been established with appropriate government ministries? Have the principals and staff who will use these facilities been involved in the design process? Who will provide equipment and training? Who will fund operation and maintenance of the building after completion? What are the specialist requirements in terms of water, sanitation and solid waste disposal, specialist

equipment and staff accommodation? Are there required environmental studies and/or assessments relating to construction? V. SURVEYS: Detailed physical planning relies upon accurate initial physical surveys. In particular topographical, geotechnical and hydrological physical surveys are important when locating housing and infrastructure to ensure that land is suitable for reconstruction, as they can highlight areas subject to hazards such as landslides, areas with soil or geological instability or areas with high water tables. Understanding the topography is also important as it determines drainage patterns, and an appreciation of ground conditions is needed to decide on the type of foundations, and limitations on excavation for toilet pits, sediment tanks, wastewater treatment ponds and utility conveyances. The surveys and strategic assessments require significant levels of technology and expertise and need to be coordinated between the contractor and government. The survey and strategic assessment ensures the construction can proceed on suitable sites, with access to the required utility infrastructure. The survey and geotechnical investigation are critical co-pieces of required engineering that will ensure the building foundations are designed based on litmus tested bearing capacities as required by systematic procedures to verify the building plot locations will rest on the required, conditioned soil and the required soil conditioning can be achieved and maintained during the construction process. VI. RISK MAPPING: Risk mapping to identify locations that had became unsuitable or extremely difficult to reconstruct facilities or were vulnerable to natural hazards exist. Risk mapping includes the identification of buffer zones and evacuation or escape routes as well as post-disaster meeting points and emergency services plans. Where there are specific plot and/or communal specific risks, reduction strategies must be derived.



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VIISPATIAL PLANNING: Lessons learned from historical construction planning show, where reconstruction focuses solely on the provision of houses, and failed to consider services, livelihoods or public facilities, houses often remained unoccupied after completion. Households preferred to remain in other accommodation closer to their place of work, or where water, sanitation and electricity are available. Therefore, good community planning can and usually is a time consuming and complicated process, as technical inputs such as site surveys and infrastructure design must be integrated with community requirements. Detailed physical planning is needed for each plot to ensure that the footprint of the house itself and the water and sanitation systems can fit, be accessed and maintained. VIIIQUALITY OF CONSTRUCTION: The accepted definition for the quality housing cannot and should not be based solely on the house size as the driver for the type and quality of construction. Hence, smaller houses are usually very cheaply constructed and very non-functional. The house design must incorporate quality, building performance and maintainability for the lifecycle of the structure. IX TYPE OF CONSTRUCTION: Is Libyas Building Code specific to a nationally mandated building system for structural, mechanical, electrical and piping that is support by documented design and construction standards? If not, substantial coordination efforts and activities are required to establish proper building systems and obtain governmental acceptance and approval of same. X MATERIALS PLAN: The scale of reconstruction in Libya will require a massive production and supply of construction materials and environmental management of waste materials and management of Libyas natural resources used to support the construction, such as water and electricity. Thus, the construction plan must include the volume of materials required and the probable shortfalls, particularly for those materials cited to come from local suppliers. In addition, the materials plan must include measures to ensure timely and cost effective import of materials in bulk. XI. WATER, SANITATION AND ELECTRICITY: Survey and Spatial Plans must show unequivocally that construction of housing can proceed on suitable sites, with access to the required utility infrastructure Key questions Does the house design meet the requirements of local, national and international standards? Have certified and license architects and engineers performed the housing design and detailing? Who is responsible for the design? Do they have the appropriate qualifications and experience? Is the design safe and buildable? Were the stakeholders/beneficiaries involved in design? Are the designs approved and will they meet all jurisdictional requirements? Is the size and spatial arrangement of the house culturally and climatically appropriate? Does the design incorporate appropriate facilities for washing, cooking and livelihood activities? Are houses easily accessible? Are there opportunities to optimize the designed construction and minimize costs? What is the potential for standardization? How is standardization balanced against the requirements for adaptation to suit the requirements of

individual households or non-standard plot sizes? Will the houses be durable and easy to maintain and allow for future adaptations/extensions?



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XII. ENVIRONMENTAL ISSUES: Historical construction planning has shown that where housing developments have focused solely on construction issues without addressing environmental issues, the quality of life of the development occupants may be adversely impacted. For a community to provide a good quality of life for its citizens, environmental issues such air quality, water quality and sanitation must be considered along with site surveys and infrastructure design. Key questions What are the available solid waste removal and disposal services? Will the construction of new houses adversely impact the capacity of existing water and waste water

treatment and transport systems? What impact will the development have on the surrounding environment including human health, flora

and fauna? What is the air quality at the proposed development location, and how will the development affect air

quality at the site and surrounding area? If existing water and wastewater infrastructure are not available or adequate, what will be the

environmental impact of constructing treatment and transport/conveyance facilities? XIII. HEALTHCARE FACILITIES: In the best of supporting environments, designing and constructing a hospital is never straightforward. It is subject to a series of risks and uncertainties and involves a number of organizations temporarily assembled for the project. The way in which the client and the various designers, contractors and hospital equipment suppliers work together as a team generally is determined by the procurement path or strategy. The whole process of creation, communication, response and integration in the context of the project can be defined as procurement and forms the contracts entered into between the project participants and the client. The procurement strategy is the outcome of a series of decisions which are made during the early stages of a project. It is one of the most important decisions facing the client. The chosen strategy influences the allocation of risk, the design strategy and the employment of consultants and contractors. Risks are allocated by means of the associated legal contracts. Thus, the procurement strategy has a major impact on the timescale and ultimate cost of the project. Therefore, hospital projects are often complex with potential for cost and time overruns or the finished building performing less well than planned. Given the uniqueness of hospital design and construction, generally the functional approach is based on common factors to all construction projects. That is:

1) The main functions and the responsibilities of those involved in a building project; 2) The project specific characteristics; 3) The management of design and construction; 4) The contract form selected (terms and conditions with specific emphasis on warranty and

liquidated damages); 5) The allocation of responsibilities for design and construction; 6) The integration of designers and contractors; 7) The project environment (external factors); and 8) Time and resources provided for the construction, given that the constructor may have to

assume corrections of errors and omissions in the design plans.



Key questions Who are the clients and what is their hospital experience specific to the project specific decision

making, funding and involvement? Project characteristics nature and complexity, cost, time, design, quality and change in design. Organization procurement form, familiarity and proximity, differentiation and coordination. Contract/risk fairness, clear responsibilities, obligations and rights, and balanced allocation of risks. Design team experienced and knowledgeable in integrated design and coordination of services,

appointment for full service (complete design information and site supervision), integrated team, and Total Quality Management (TQM).

Construction team experienced and knowledgeable in construction and coordination of specialist contractors, professional project management, good interfacing, coordination and effective resolution of conflicts, TQM and inter-dependent organizations with effective integration, mutual trust and cooperation.

SUMMARY: Our Joint Venture will be tasked to perform a Constructability Review of Plans, Specification and Estimate (PS&E) Packages, possibly without benefit of being able to talk to the producers of the PS&E. Constructability Review is critically important in building design. This is particularly critical specific to the construction of the prospective hospital project and other like kind projects, since no buildability input by actual contractor assumes the original hospital consultants are very experienced planners, engineers, designers and constructors. Other risks notwithstanding, the specific risks here is the susceptibility to client and constructor driven changes that can be more expensive in both indirect cost and in disruption costs when the original building sequence and/or construction schedule is affected. So what are the potential of constructing a design without access to the original parties? The present client must be totally familiar with the PS&E package or the opportunity for disputes will

be increased due to incomplete documentation The client is at risk where the contractor does not fully know about hidden errors and omissions and

thus cannot appreciate the full risks associated with design. Similarly, the client is at risk if the contractor does not have full indemnity insurance coverage.

Constructor can be the de facto designer compelled to make changes that are contrary to the clients design team intent as depicted on the drawings.

Design quality is inferior to those produced under traditional procurement methodology. Finally, it is our understanding that existing Libyan towns are characterized by a strict distinction between public and private use of space. The streets, cafs, mosques, and shops are architecturally that of a masculine world, while the domestic compounds are architecturally that of a feminine world. The house gardens, usually worked by families, are sanctuaries, not to be entered by strangers. The compact nature of fortified residential centers gives them a distinctive character. Streets are narrow and twisting. In some areas, kin groups, looking to extend the space available to developing extended families, have joined houses at the second-story level over the street for living quarters. This bridging effect produces long canopied cul-de-sacs, where kin groups may convert public to private space by gating the residential quarter. Whole communities may extend this concept of the privacy of space to the reception of strangers. Will this historical concept of Libyan housing/communities be required to continue under Libyas new housing per the reconstruction of Libya? Charles A. Richardson, P.E. Program Manager [email protected] 06/02/13

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Libyan Project Reference Document 06-2013-1

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