AJCE Newsletter March 2004

Changing the Roles of Japanese
Consulting Engineers

Tokuji TOMARU, Dr. Eng.
President, AJCE

and the more the level of our life has become
high and affluent, the more the people come tocriticize such basic infrastructure projects as
roads, river improvement and dam projects
necessary for their daily life. They have become
interested in rather the preservation andrestoration of the natural environment than thedevelopment of the infrastructures. Furthermore,
after the burst of bubble economy in 1990's, thecentral government couldn't allocate enoughbudgets and staffs for the infrastructuredevelopment and now intends to introduce
private ability, know-how and finance to theseprojects.
Under these circumstances, consulting engineer's
roles are expected to change into independent,
impartial and responsible differing from the past
supporting parties. There are several hurdles toclear in order to realize this real consulting
engineer's roles. One of them is the Japanese
legal system. It is true that the government isprimarily responsible for the development of
infrastructures, which employed many excellent
engineers with high level know-how and skills.
But the social situation is changing and not only
government but also the people are expecting andwelcoming private power and ability.
The time has come when our consulting
engineer's should play the important and majorrole in the process of the infrastructuredevelopment. We, consulting engineers, are now
not the supporters but main players in the society.

The Association of Japanese Consulting
Engineers (AJCE) was established in 1974, andcelebrates its 30th anniversary this year. Since
the establishment, AJCE has been making efforts
to promote consulting engineers activities and toheighten their raison d'etre. On this goodoccasion, we are planning to hold a symposium
to discuss the consulting engineer's role in Japan.
The development of the social infrastructure in
Japan has been historically carried out by thecentral government which has its ability andbudget based on the legal system. It was only
about 50 years ago that the government began tooutsource construction and engineering works forthe projects to construction contractors andconsultants. Since then consulting engineers havebeen invited and involved in the upstream jobs
and design works of the projects planed by thegovernment. But their roles were limited to thevery small extent of jobs, such as data collection,
calculation, analysis, drafting and so on, as
supporting parties who had no right to judge thefeasibility and adaptability of the projects.
The drastic progress of Japanese economy in1950's and 1960's depended mostly on the highspeed development of social infrastructure
conducted by the powerful central government.
Japanese people are now enjoying affluent life.
We can say that the implementation system of
infrastructure development has been functioning
very well.
The more infrastructures have been developed

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AJCE Newsletter March 2004

Opinion of AJCE
- Introduction of Objectives and Activities of
AJCE Committees Objectives of AJCE have been realized throughactivities planned and steered by its standing
committees. Members of each committee have been
participating on a voluntary basis, and this will be thecase in the future. This article describes the objectives
and activities of the committees as the first step toaddress AJCE's opinion. Two committees selected torepresent the AJCE are the International Activity
Committee (IAC) and the Professional Training
Committee (PTC). These two are playing their roles
most actively among AJCE's standing committees. In
addition, six members of the two committees, four of
IAC (Hirotani, Kurashige, Fujikura and Sakurai) andtwo of PTC (Yamashita and Sasabe) are also actively
participating in FIDIC committees activities. There
are five sub-committees (SC) and one working group(WG) under IAC and four SCs under PTC
corresponding to FIDIC task forces, and each has an
unique role. Objectives and activities of the four SCs
and one WG of IAC are presented in Section 1,
followed by a description of those of PTC and its SC
in Section 2.

(1) ASPAC NewsFor each ASPAC MA, "ASPAC News" has beenreleased on the FIDIC Home Page for the purposeof information distribution.
(2) Information Exchange with International
Organization(s)Information exchange and instructor dispatch for
UN Technical Consultancy Development Programfor Asia and the Pacif ic (TCDPAP) was
conducted.
(3) Development of the Information Exchange
SystemFor the purpose of achieving real-time informationexchange amongst ASPAC MAs, ASPAC-SC had
been evaluating the information exchange system
on an electronic message board which can be
written on the Home Page. ASPAC-SC developed
the independently operable system in 2003, and iscurrently requesting the creation of the link on the
FIDIC Headquarters Home Page. If this system
can be accessible via FIDIC Headquarters Home
Page, information exchange amongst ASPAC
MAs will be promoted, and expected to be asuitable tool for resolving the various issues
specific with ASPAC.

1. International Activity Committee (IAC)
Terms of Reference (TOR) for the committee include
the following, and these are general objectives of its
sub-committees:(1) Cooperation with FIDIC's activities(2) Exchange of information with other member
associations(3) Provision of information to Japanese consulting
engineers(4) Dispatch abroad information about Japaneseengineers

1.1.2 Issues to be Addressed

During the FIDIC Annual Conference in 2003, due tothe replacement of ASPAC chairman, ASPAC
Secretariat was taken over by ACES, Singapore MA.
Compared to other regional groups of FIDIC,ASPAC's activity has been hardly to say active,
nevertheless ASPAC-SC's contribution to enhance inrecent years.Thus it is necessary to make further
improvement. ASPAC particularly holds structuralissues such as widely scattered participant MAs, large
gap in national conditions among MAs, etc., so it isnecessary to deter mine the direction forreinforcement. Division of ASPAC into multiple subregional groups may be considered in this respect.

1.1 ASPAC Sub-Committee (ASPAC-SC)
1.1.1 Roles and Activities

In 2001, after the appointment of Dr. Ishii as the
ASPAC chairman, who was AJCE Chairman at thattime, ASPAC-SC was established. Based on the
ASPAC's TOR, AJCE assigned a role for ASPAC
Secretariat, and ASPAC-SC assumed a responsibility
for achieving such a role. As ASPAC secretariat,
ASPAC-SC prepares materials and proceedings for
the ASPAC GM which is held once a year, and for the
ASPAC EMC twice a year. In addition, ASPAC-SC
has been conducting the following activities.

1.2 Business Integrity Management System SubCommittee (BIMS-SC)
1.2.1 Objectives

AJCE has been supporting the anti-corruption stanceof FIDIC since the 1995 Istanbul Conference. In
accord with this policy, BIMS-SC was set up in 2000
within IAC. The major objective of this sub2

AJCE Newsletter March 2004

committee is to study FIDIC publications and policies
on integrity and anti-corruption in the consulting
engineering industry and to introduce BIMS in Japanto peers, clients and other concerned parties.

1.3 Quality Based Selection Sub-Committee(QBS-SC)
1.3.1 Previous QBS Task Force (QBS-TF) and Its
Reform to Sub-Committee

Despite past achievements in promoting theimplementation of QBS for consulting services, theADB changed its method for selection of consultantsfrom QBS to QCBS. This change would havenegative impacts on the business of Japanese
consultant f irms to participate in ADB funded
projects. As soon as AJCE noticed that ADB wouldchange its policy, it established QBS-TF in 2002 withlimited TOR to analyze the impact of QCBS andprovide timely comments or requests to ADB. QBSTF performed the activities mentioned below until
March 2003 and terminated its TOR. Then AJCE
decided to reform QBS-TF to QBS-SC since its
existence is considered to be necessar y on acontinuous basis as the objectives and the activities
became more important.

1.2.2 Activities

In 2001 before the FIDIC Montreux Conference, Mr.
Stan Kawaguchi (EC), a member of the FIDIC
Integrity Management Task Force, was kind enoughto hold a BIMS Seminar for AJCE in Tokyo. BIMS
was widely presented to AJCE members through an
introduction of the system, including a summary of
the BIMS Seminar, published in the July 2001 edition
of AJCE bulletin. "Guidelines for Business Integrity
Management in the Consulting Engineering Industry(Test Edition)" was published later in 2001 and wastranslated into Japanese by members of the BIMS-SC
supported by other members of IAC.
In 2002, before the FIDIC Acapulco Conference,
AJCE approached the Japanese Ministry of Land,
Infrastructure and Transport as well as the Japan
International Co-operation Agency (JICA) and theJapan Bank for International Co-operation (JBIC) tointroduce and explain the aims of BIMS. Also, in2003 just before the Paris Conference, FIDIC
President Mr. E.S. Pedersen and AJCE Vice President
Mr. Akihiko Hirotani made visits to JBIC and othergovernmental offices to promote FIDIC activities
including BIMS. In continuing our efforts tointroduce BIMS in Japan, we are now finishing theJapanese translation of the "Business Integrity
Management System Training Manual (First Edition
2002)" and the translations of both the BIMS
Guidelines and Training Manual should be ready for
publication shortly. Also, AJCE is planning for aseminar to discuss integrity and anti-corruption tofurther deepen our understanding of the issue.

1.3.2 Efforts by Previous QBS-TF(1) Support FIDIC for the Preparation of the
Guidelines
QBS-TF prepared AJCE's comments on " FIDIC
Guidelines for the Selection of Consultants". We
sent comments to FIDIC QBS-TF several times
regarding mainly "importance of TOR", "weightof cost evaluation", and "necessity of monitoring
and consideration of project life-cycle-cost".
Intensive discussions were maintained among
members to collect thoughts on these matters. We
appreciate that the FIDIC Task Force reflected ourcomments in the final version.
(2) Action to ADB
Appeal to ADB against QCBS together with two
Japanese consultants associations, viz.
Engineering Consulting Firms Association(ECFA) and Infrastructure Development Institute(IDI), in July 2002 insisting that QBS should be
the recommended and preferred selection method
for consultancy services. We also requested ADB
to monitor and publicize the evaluation results.
In November 2002, we sent a letter to ADB statingthat three Japanese consultants associations, viz.
ECFA, IDI and AJCE stand ready to support
ADB's monitoring.
In February 2003, we participated in the ADB
seminar, and submitted the monitoring plan (draft)
for their review.

BIMS is basically a system for compliance to anticorruption policies; therefore, we feel that it isfeasible to presume that a practical approach in manyindustrialized countries is to adapt BIMS into asystem for developing compliance checks for related
laws and regulations. In Japan, anti-trust laws are ofmajor concern, but a system flexible enough toincorporate any type of anti-corruption law or
regulation should be useful to many consulting firms
worldwide. We look forward to discussing thispossibility further within AJCE and introducing any
positive comments to FIDIC and other interested
parties in the future.

1.3.3 Activities

Since the reform, QBS-SC has been actively playing
its role with the current action plan mentioned asfollows.
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AJCE Newsletter March 2004

the urgently important issues among FIDIC activities.
We hope our CB-SC will be usefully active in thedevelopment of the CB program with FIDIC and also
for the development of CB activities of Japanese
consulting engineers who would enhance and assist
the CB for the engineers of developing countries
through inter national cooperation projects or
technical assistance programs. We appreciate verymuch any suggestion, advice and comments on our
CB-SC activities.

(1) Communication with ADB
To send our comments or requests concerned withselection results and to obtain results ofmonitoring(2) Study on domestic or overseas selection methods
to maintain the professional services(3) Cooperation with the other 3 Japanese associations
1.4 Capacity Building Sub-Committee (CB-SC)
1.4.1 Objectives

CB-SC was established in 2003 having prospective
main objectives as follows:(1) Disseminate information of FIDIC Capacity
Building Task Force (CB-TF) including an
introduction of related FIDIC documents to AJCE
member firms and other parties concerned in theconstruction industry in Japan.
(2) Cooperate with other professional associations ofconsulting engineers in Japan for the promotion of
capacity building and development.
(3) Cooperate with FIDIC and other MAs forpromotion of capacity building, including thebenchmarking system, etc.

1.5 Quality of Construction Working Group (QoCWG)
1.5.1 Objectives and Activities

AJCE supports the FIDIC QoC-Task Force (QoC-TF)
within the FIDIC Business Practice Committee(BPC). QoC-WG is responsible for preparation of
QoC Guidelines within AJCE.
FIDIC BPC was established at the Hawaii Conferencein 2000 and assigned various tasks to each member ofthe committee. QoC-TF was established at the sametime and joined by Akihiko Hirotani, Japan (Chair),Jean Felix, France, Alan Green, Canada, Xie
Shaozhang, China, Akira Shiroya, Japan and Peter
Silbernagl, South Africa. AJCE QoC-WG was alsoestablished soon after to support the activities of
QoC-TF. AJCE QoC-WG has since been very active,
while conferring with other QoC-TF members. It is
responsible for supporting the preparation of QoC
Guidelines at various stages starting from theimplementation of FIDIC survey to verify the extent
of problems, preparation of QoC Guidelines draft andupdating them. The QoC Guidelines are at the final
stage of preparation after being recognized by the
FIDIC 2004 January ECM and now ready to bereviewed before printing.

1.4.2 Activities

To start the activity of CB-SC, f irstly, it wasnecessary to review in detail the purposes, present
activities, and situation of CB-TF then discussed with
CB-TF members at the FIDIC '03 Annual Conferencein Paris. It was obvious that the importance of CB isnot only for consulting industry of developing
countries but also of developed countries. Upon
return from FIDIC '03, discussions ware made at IAC/ AJCE on what and how the practical as well as
useful activities that shall be undertaken by CB-SC
thus itemized the possible activities as follows:(1) Research and translate as necessary the important
documents including materials of FIDIC
regarding CB in order to inform, broaden andassist the CB activities to the Japanese consulting
industry for their effort on capacity building /development.
(2) Hold seminars and other discussions to identify
the problem area in consulting industry as well as
consulting engineers of Japan and work on theircapacity building /development.
(3) Participate in FIDIC CB-TF activities to study,
promote and carry out further development on the
CB activities in cooperation with other MA
members.
(4) Report and discuss with the FIDIC and MAs
regarding CB activities of Japan and obtain theircomments for the further development of CB
activities in Japan.
IAC/AJCE feels that CB should be placed as one of

The Guidelines are prepared with the backgroundinformation as follows (some excerpt from FIDIC
Policy on QoC);"The survey on Quality of Construction by FIDIC
within Member Associations in 2001 confirmed that
failure to achieve appropriate Quality of Construction
is a problem worldwide. The pressure to reduce theinitial costs of construction and supervision were
found to have had an adverse effect on quality, as
could be predicted. The problem is serious and isevident in both developed and developing countries.
Within the conventional processes for the
procurement of construction contract, contractors,
who are keen to win tenders, can do so by submitting
low prices, but at the risk of not being able to produce
construction work, which fulfils the specification or
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AJCE Newsletter March 2004

committees, and represents PTC in planning,
adjusting and carrying out AJCE activities. The
biggest mission of PTC in 2004 is to plan andimplement AJCE 30th anniversary symposium inMay.

meets sustainable standards. Likewise, consultants
may be under pressure to reduce the initial cost of
construction and construction supervision so that
contractors are not able to produce the required
quality. Lack of quality in construction is manifested
in poor or non-sustainable workmanship, and unsafe
structures, and in delays, cost overruns and disputes
in construction contracts. Consultants are often
appointed by a client for a partial service only during
construction. This increases the risks to the client andthe consultant with respect to the quality and safety of
construction, and frequently increases the overall costof the project when account is taken of delays anddisputes. Longer-term costs such as increased
maintenance will also be incurred. FIDIC wishes totake a leading role in working with other stakeholders
to address this potentially serious problem."

2.3 Activities & Seminar Promotion Sub-Committee(ASP-SC)

ASP-SC has been initiating AJCE annual seminars,
FIDIC conference report seminars, and planning &implementing Young Professionals Exchange
Program (YPEP) between AJCE, ACEA and ACENZ
in close collaboration with YPF-YPEP-SC (refer to
Section 2.6 of this article). Theme of the 2003 AJCE
annual seminar was "Prospect of Japanese Consulting
Engineers in Global Market - A new challenge".
Keynote speakers were invited from EBRD and amember f irm (PFI expert) following panel
discussions. Issues such as low share of Japanese
consulting engineers in IFI projects- background,obstacles and the ways to increase share; newbusiness development in PFI projects; collaboration
with foreign consulting engineers: difference inprocurement between domestic and oversea projects,
etc. were discussed. The sub-committee also held aseminar on 2003 FIDIC conference for AJCE
members.

Actual FIDIC POLICY at the moment is drafted asfollow (some excerpt from the FIDC Policy-Draft);"FIDIC believes that constr uction should besustainable, and to this end, it is the policy of FIDIC
that each party in the construction process should becommitted to satisfying its obligations in respect toachieving Quality of Construction. The Guide for
Quality of Construction recommends a Best Practice
approach to achieving proper Quality of Construction
and Action to be taken by each party concerned: i.e.
by government, by international financing agencies
and by industry. Engineering is not value-free andhence the approach that organizations take in solving
problems is influenced strongly by the values andbeliefs they hold. Values and beliefs drive attitude andbehavior, and thus outcomes."

2.4 FIDIC Policy Sub-Committee (FP-SC)

FP-SC planned and implemented a session in the
Third World Water Forum (WWF3) held in Kyoto,
March 2003 titled "Sustainable and Secure Water
Delivery and Flood Control Systems". The session incollaboration with FIDIC was chaired by Dr. Ishii.
Preparation of the WWF3 started by following thedecision made at 2002 Montreaux ECM. Former
president Mr. Eigil S. Pedersen presented the keynote
speech and contributed valuable opinions in the panel
discussion which was moderated by Mr. Stanley
Kawaguchi. Our proposed keywords "Capacity
Building" and "Technology Transfer" were reflectedin the final Ministerial Declaration. Mr. Pedersen was
invited as one of the panelists in the plenary session
to represent views of CEs in solving world water
problems. The AJCE-FIDIC session was carried out
in great success, attended by overflowing participantsand vigorous exchange of opinions. In addition toWWF3 involvement, the sub-committee has beentranslating FIDIC SD-TF report "a unique capacity toaddress priorities". It will be finalized and publishedafter permission of FIDIC to AJCE members as wellas to Japanese consulting engineers in 2004. At themeeting held in Dec. 2003, the sub-committee
decided to follow up with the FIDIC SD-TF's
indicator report.

QoC-WG is proud of itself in suppor ting the
preparation of QoC Guidelines which is an important
activity of FIDIC QoC-TF.
2. Professional Training Committee
2.1 General Objectives

The Professional Training Committee (PTC) is
composed of PTC Management Board and 4 subcommittees; Activities & Seminars Promotion subcommittee, FIDIC Policy Promotion sub-committee,
Professional Career Development sub-committee and
FIDIC-YPF sub-committee. PTC aims to promote
activities of AJCE and to support those of FIDIC byplanning and implementing various programs as
described below.
2.2 PTC Management Board

PTC Management Board discusses and decides PTC
policy matters such as TOR and action plans of sub5

AJCE Newsletter March 2004

business between companies could grow fromfriendship between individuals", with the exchange
program a way to promote long term friendships.

2.5 Professional Career Development SubCommittee (PCD-SC)

PCD-SC focuses its activity to promote Continuous
Professional Development (CPD) among AJCE
members as well as to outside consulting engineers.
Three CPD seminars were held in 2003, i.e. "Threeparties-structure in public works procurement anddelivery in Japan", "Comparative case studies ofprocurement in developed countries", and "Energy
saving and cost effective renovation business". In
2002, the sub-committee held a colloquy withacademic and professional experts on "Examinationof management business, e.g. CM & PM in public
works projects and future prospects in Japan" after
which the outcome of the discussion was reported in
AJCE bulletin. Three CPD seminars are being
planned for 2004.

During the first three years of its operation, there
were two-way exchanges each year between Japanand Australia. Since 1999 exchanges between Japanand Australia have taken place in alternate years toensure long term sustainability of the program.
ACENZ (New Zealand) also joined the program in
1999, 2000, and 2001. The aims of YPEP include; i)cross-cultural experience through home-stay; ii)
training in technical and operational aspects of thehosting companies; and, iii) learning andexperiencing each other's business and social
cultures. The number of participants to YPEP from
1996-2003 amounts to a total of 75. The program issteadily accumulating positive results for the relevant
associations.

2.6 Young Professionals Forum and Young
Professionals Exchange Program SubCommittee (YPF-YPEP-SC)
2.6.1 Objectives

2.6.3 Young Professionals Forum (YPF)

Another major activity of AJCE for the young
professionals is the support of FIDIC-YPF. The
requirements mentioned above, promotion of young
professionals' participation and eventual vitalizationof the whole organization, are those also for FIDIC.
For these, General Round-table Session for Young
Engineers was held in FIDIC 2000 in Hawaii, andestablishment of "FIDIC Young Forum" was proposedfor opinion exchange among young engineers. In
FIDIC 2001 Montreux, a discussion was held for therealization of the Young Forum, and the start of
FIDIC YPF was announced at GAM. TOR and
Action Plan were discussed in FIDIC 2002 Acapulco,and the TOR was approved in the EC Meeting inJanuary 2003.

We are all concerned that young members of theConsulting Associations are not very actively
participating in activities of their own Associations.
Promotion of young professionals' participation in theactivities of the Association through creation ofopportunities to exchange their opinions, concerns,
and visions, and eventual vitalization of theConsulting Engineering Industry is now an urgent
issue.
AJCE has been conducting various efforts in order topromote the participation of young professionals in
our activities. YPF-YPEP-SC under PTC is in chargeof this task. Activities included are; study on
activities of FIDIC by FIDIC Study Group;
promotion of mutual understanding by young
professionals through Young Professionals Exchange
Program (YPEP) between Japan, Australia and New
Zealand; support of FIDIC-YPF for the vitalization of
FIDIC as a whole; and, holding of periodical internalseminars to raise capacity of young professionals.

YPF-YPEP-SC has strongly been supporting theactivities of FIDIC-YPF from the start at the Hawaii
Conference. FIDIC YPF is now in a stage to promote
actual activities through the participation of the real
young. In 2003, YPF-YPEP-SC supported FIDICYPF in the Paris Conference. For the realization of
web-based discussion environment as proposed in theaction plan, YPF-YPEP-SC prepared a draft of
FIDIC-YPF Web Page. FIDIC Secretariat prepared atrial version based on the proposal by the YPF-YPEPSC. Paris YPF meeting was successful in realizing
presentation from young professionals and fruitful
discussion among them. Now is the stage to utilize
the web-environment discussion tool, and YPFYPEP-SC is strongly supporting it.

2.6.2 Young Professionals Exchange Program(YPEP)YPEP commenced in 1996 as a result of a
Memorandum of Understanding signed between
AJCE and ACEA (Australia) in October 1995 tofacilitate closer ties between the Associations. YPEP
is an annual exchange program of young
professionals between Japan and Australia. The
young professionals undertake a three-four week
training program that includes technical, social andcultural activities. The general principle behind
YPEP is that "cooperation between organizations, and6

AJCE Newsletter March 2004

Opinion of AJCE:List of Authors
TitlesAuthors
Introduction of Objectives and Activities of AJCE Comittees Masafumi MIYAMOTO (Vice- Chairperson of IAC)
ASPAC Sub-Committee
Takeya ISOBE (Chairperson of ASPAC Sub-Committee)
Business Integrity Management System Sub-Committee
Shinichiro FUJIKURA(Chairperson of BIMS Sub-Committee)
Quality Based Selection Sub-Committee
Eiji KAWAKAMI (Chairperson of QBS Sub-Committee)
Capacity Building Sub-Committee
Hajime SAKURAI (Chairperson of CB Sub-Committee )Quality of Construction Working GroupAkihiko HIROTANI(AJCE Vice- President / Chairperson of IAC )Professional Training Committee
Yoshihiko YAMASHITA (Vice- Chairperson of PTC)
Activities & Seminar Promotion Sub-Committee
FIDIC Policy Sub-Committee
Professional Career Development Sub-Committee
YPF-YPEP Sub-Committee
Keiji Sasabe (Chairperson of YPF-YPEP Sub-Committee)
The editorial cooperator
Toshio KURASHIGE (Vice -Chairperson of IAC)

AJCE/ACEA
Young Professionals Exchange Program Reports 2003
Young Professionals Exchange
Program (YPEP) 2003

Keiji SASABE
Chairperson of the YPF・YPEP Sub-Committee

his or her experience was really valuable in themeaning of cross-cultural experiencing throughhome-stay, knowing of Australian culture in thebusiness practice and way of living, etc. A new
program "Young Professionals' Project" wasintroduced in YPEP 2003 in order to obtain more
concrete outcome. The purpose of the Project waslearning to understand business practice differencesin Australian and Japan. Trainees were given tasks
during the Program to study proposal and BID
preparation process. The accomplishment of eachtrainee was presented in Young Summit held at theend of the Program. YPEP is steadily getting
concrete outcome for both Japan and Australia.

Outline of Young Professionals Exchange Program(YPEP) is explained under the article of YPF-YPEP
Sub-Committee of this News Letter. YPEP 2003 washeld for a four-week period from October 5 toNovember 2, and seven Japanese young professionals
visited Australia and had valuable experiences. Hostcompanies in Australia and the Japanese companies
that the trainees belong are as follows: Cardono
MBK - Oriental Consultants, Douglas Partners - OYO
International, SMEC - NIKKEN Consultants / PCI,
GHD - CTI, Steensen Varming - MORIMURA,
Hyder Consulting - CHODAI.
After come back to Japan, every trainee reported that
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AJCE Newsletter March 2004

Young Professionals Exchange
Program 2003 in Australia

Takashi HARA
Engineering Geologist
OYO International Corporation

1. Introduction
I participated in the Young Professionals Exchange
Program, an exchange-training program that has been
held for the past eight years and sponsored byconsultant engineering associations from Australia,
New Zealand, and Japan. The participants were sevenyoung engineers from consultant companies in Japan,
specializing in different respective fields. We weregoing to train in Australia for a total of four weeks
but, to our regret, were unable to have the chance tovisit New Zealand this time. The purpose of theexchange program is to broaden our horizons throughthe international exchange of young engineering
professionals and to deepen the mutual understanding
between our countries. In addition, the comparison
and research of typical Japanese and Australian
proposals and respective competitive bidding matterswere also studied. I was also especially interested instudying advanced hazard/risk assessment inAustralia, and I had the opportunity to participate insuch training.

conditions at each construction progress step were
evaluated and some comments and proposals were
given. The 1-2 reports with sketches were written onsite and submitted to the client. Having been shown
the sites, I was very interested in rock excavation. The
Mesozoic sandstone layer is found throughout
Sydney and the surrounding areas. The cut slope on
construction was almost vertical, although there was
one where some inclinations were applied on theslope road. A huge disk rock cutter was used to makethe slope. For me, it was the first time to see suchheavy equipment. The idea of the cut slope countermeasures was also interesting. A counter measure is
only applied to unstable places. So, when shot-crete isgiven to one slope, it is not applied to healthy slopesin that spot, creating a kind of patchwork on the cut
slope. It thought it was a reasonable method, although
the externals were not so good.
In the office, I had the chance to inspect reports of
the risk assessment of landslides and falling rockcollapse, which was a concern before visiting
Australia. Guidelines concerning the risk hazard
assessment of a lot of fields have already been set inAustralia. Efforts have been made to decrease the

2. Host Company
My host company was Douglas Partners Pty Ltd.
(hereafter referred to as DP) in Australia. DP is
primarily based in Australia, and is an engineering
consultancy specializing in the fields of geotechnics,
environment, and groundwater. DP handles projects
not only in Australia but also in other countries,
particularly in Southeast Asia. I had the opportunity
to study in the Sydney office for two weeks and in the
Newcastle office for two weeks.
3. Training Program(1) Training in DP
I had the opportunity to visit some project sites
during the training program with DP. These projects
were in construction sites and developed land, andconsisted mainly of consultation on ground condition,
cut slope stability, and ground pollution. GroundRockcutter
8

AJCE Newsletter March 2004

home stay program, staying with two families in
Sydney and with three families in Newcastle. I wasvery satisfied with Australian lifestyle, customs, andcuisine. Actually, I enjoyed playing canoe on thebeach with surfers before work. I had a chance to eat
not only Australian cuisine, but also Indian and
Malaysian food when some engineers from DP
invited me to dinner. On the weekends, I enjoyedswimming and camping on the beautiful beaches andbushwalking in the national parks. Since I was free todecide my own schedule, I had time to go sightseeingin the city, too.

differences in the results as much as possible,
depending on the engineer who executes the work,and have been made clear the process of the work. As
this field is now also being actively developed by
Japan, this experience was beneficial to me. I also
inspected the original business guidelines and reportsof past projects. The business guidelines detailed theprocedures in each type of project, from receiving thebusiness offer to submitting the final report, though it
is a matter of course for ISO acquisition enterprises.
The guidelines were easy to use for the staff. In
particular, the proposal preparation manual was
designed so that anyone could easily and immediately
submit a proposal, including budget, to the client. I
thought that this was very important.

5. Impression
Though I had made many plans before leaving
Australia, the training period was not long enough todo everything I wanted. Therefore, I must go back toAustralia again in the future. I experienced life andwork in Australia through the home stay program, andI was interested in the differences between Japaneseand Australian lifestyles. As I had imagined, theAustralian approach to work is significantly different
than that of Japan. Work is often the center of one's
life in Japan, while in Australia family and private
time is usually the center. Therefore, Australians strikea proper balance between work and private life. I
strongly felt that I should learn to do this.

(2) Weekend Activities
Every Saturday, we participated in ACEA sponsoredactivities, including horse riding, trekking in the Blue
Mountains and the Jenolan cave, and dolphin
watching. I will always cherish the memories of thesewonderful experiences. Our training period inAustralia coincided with the hosting of the rugby
World Cup, and DP arranged for tickets to the Japanvs. USA match for us. The game was good, and I
cheered vigorously, though, to our regret, Japan lostby a narrow margin.

6. Acknowledgement
First, I would like to express my thanks to all persons
and parties involved in this exchange program.
Particularly, I would like to give many thanks to Mr.
Allan McConnell and Ms. Mina Hayashi in ACEA,
who organized and arranged our stay in Australia, andto Mr. Goro Fujie, Mr. Hiroto Tachibana, and themembers of the Young Professionals Forumcommittee in AJCE, who gave me the opportunity toexperience this program and who took care of theJapanese trainees throughout the program. Throughtheir hard work, this program was a success. And,
most definitely, I am very indebted to DP and to the
DP Newcastle branch. They treated me very kindlyand friendly throughout my training program, eventhough their own schedules were very busy. I deeply
appreciate: Mr. Michael Thom, who was my hostfamily in Sydney and who took care of me bothofficially and privately; Mr. John Braybrooke, who
was also my host family in Sydney, and who gave mea lot of good advice and suggestions for my career;
Mr. John Harvey, who organized and arranged mytraining program in the DP Newcastle office; Mr.
John Niland, who was my main host family in
Newcastle and who treated me like an old friend; andall the other staff of DP and the DP Newcastle office,their families and their friends.

(3) Afternoon Drink"Afternoon Drink" was a weekly event sponsored by
the host companys. Every Friday evening, we could
exchange information and deepen friendships withexperts from many fields. Moreover, it was a good
situation for the Japanese participants to talk to andmingle with our hosts from Australia.
(4) Young Summit
On the final Friday, we held the "Young Summit," inwhich we presented what we had learned in the
program and discussed our presentations with otheryoung professional engineers from Australia. The
subject of the presentation was: "Comparison
between the proposal of Japan and Australia andcompetitive biddings." Everyone had been informed
before arriving in Australia of his respective hostcompany, and each Japanese trainee gave such apresentation. Because the agenda was clear, engineersfrom both Japan and Australia found it easy to
discuss, and we had an animated discussion in thesummit. The discussion about the insurance system
concerning the design and specif ications of the
project was especially lively.
4. Home Stay
I had an exciting experience everyday through the9

AJCE Newsletter March 2004

CONSULTING ENGINEERS TRAINING
FOR THE GLOBAL MARKET

Stanley, KAWAGUCHIFIDIC former Executive Committee Member

period of profound change. This is nothing new as
our industry has always been on the leading edge ofprogress. However, the distinguishing feature of thecurrent round of change is that the rate of change isincreasing and the scope of change is all
encompassing.

In a short six month period spanning September 2000
to April 2001, two significant activities took place
involving the training of consulting engineers to meetthe challenges of the global market.
In September 2000 during FIDIC's Annual Meeting,which was held in Honolulu, Hawaii, the younger
members of FIDIC decided to establish a Young
Professionals Forum or YPF.

Major and accelerating technological advances incomputing sophistication and power, communications
initiatives, and the dynamic growth of the market
economy are all part of the comprehensive set offorces currently affecting our industry.

Then in April 2001, FIDIC together with China's
prestigious Tsinghua University in Beijing, and the
China National Association of Engineering
Consultants (CNAEC), jointly established a training
center on the campus of Tsinghua University. This
training center is more commonly referred to as the
FTC Training Center, in recognition of its original
founder organizations.

It is in this type of business environment that theprivate consulting engineer is being called upon toplay a larger and more inclusive role as projects
become more comprehensive and clients look forinnovative ways to deliver their projects within timeand budget constraints.

THE CHANGING ROLE OF CONSULTINGENGINEERS
Both the YPF and FTC are about FIDIC's longstanding interest in CAPACITY BUILDING - a major
challenge that faces our industry in today's global
market. However, this interest is not just in thebuilding of basic capacity, but rather in elevating theprivate practice of engineering to a level where
consulting engineers are increasingly recognized by
our worldwide society as leaders and creators ofwealth in society.

Consulting engineers are being asked to assume alarger role in new project delivery systems, to beaccountable for total project delivery, and to seek
ways to protect and enhance the natural and social
environment, while at the same time protecting theclient's interests.
Today's consulting engineers are being called upon totake on the role of program managers and facilitators
responsible for a broad scope of services. Many otherdisciplines (scientists, biologists, architects, planners,
archaeologists, social scientists, financial experts,etc.) are now part of the staffs of consulting
engineering firms.

In 1998, FIDIC issued a report on the future of
consulting engineering. This was the Task Force 21
Report, which was entitled "Engineering Our Future".
The contents and direction of this report about the
future of consulting engineering worldwide are veryclear - it is to PROVIDE LEADERSHIP AND BE
PROACTIVE.

We are being asked to do more than just design
bridges, buildings and other infrastructure. We arebeing asked to conceive, plan, program, design,
supervise, arrange financing, maintain and operatefacilities.

Our global consulting engineering industry is in a
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AJCE Newsletter March 2004

FORMALIZED TRAINING
Another answer to Steyn Laubscher is formalized
training. The leadership of the China National
Association of Engineering Consultants (CNAEC),
which is the FIDIC member association in China,
took up President Laubscher's challenge and put its
effort towards the establishment of a formal training
center in Beijing, China. In January 2001, CNAEC
approached the FIDIC Executive Committee with aformal proposal for the establishment of aninternational engineering business training center atTsinghua University in Beijing.

This more comprehensive role requires that today's
consulting engineers, in addition to being
professional engineers, must be excellent businesspeople who are knowledgeable on a wider range ofissues. In other words, consulting engineers today
must respond to ever changing market needs and be
prepared to offer the clients what they ask for.
THE CHALLENGEAt the 1998 Edmonton meeting, then FIDIC
President Steyn Laubscher of South Africa, in his
opening address issued a challenge to all consulting
engineers around the world. His challenge was,Not surprisingly, our Chinese colleagues had also
begun to notice the changing pressures that themarketplace was placing on them. This thought was
clear in their proposal which stated:"Adapt or die! If we consulting engineers aregoing to remain relevant, we need to reinvent
the ways in which we do business."
One answer to Steyn Laubscher's challenge is the
MENTORING AND TRAINING of our young
upcoming consulting engineering professionals.

"The design professionals in China areprimarily technically oriented because of theireducation, training and experience. Many ofthem have not had the opportunity to assume
consulting duties prior to the design phase of a
project. On the other hand, both theirincreasing market oriented clients and thegrowing size and complexity of capital projects
have created a great demand for a much wider
range of consulting services. In some cases, thedesign professionals have to take on the role ofproject manager and facilitators responsible fora broad scope of services. Unfortunately, manyof them are not quite competent for theassignments and they have realized that theyneed to be trained in such internationallyaccepted consulting practice as FIDIC
represents before they could help their clients.
---There is a growing need to expand thecapacity of our engineers to provide thisbroader range of service."

MENTORING OUR YOUNG CONSULTINGENGINEERS
Mentoring usually speaks to the process whereby asenior person provides advice and guidance to ayounger person. AJCE has taken this mentoring
concept several steps further when it took on theleadership of FIDIC's Young Professionals Forum or
YPF. Instead of having an individual mentor, ouryounger consulting engineers in various countries
now have an opportunity to network with each otheron issues of common concern.
The YPF was born during FIDIC's Honolulu meeting,which was held in September 2000. This was thehistoric FIDIC meeting for which the U.S., China,
and Japan were joint co-hosts. Members of AJCE
took an active role in the planning and execution ofthis meeting and were instrumental in carrying out aroundtable for younger professionals. It was out of
this roundtable that the YPF was born. The desire to
network and to exchange ideas and experiences drove
this decision for the YPF.

The "Vision" section of the proposal also stated thatthe programs of the training center would be open toattendees from countries neighboring China.
The FIDIC Executive Committee agreed to participate
in the establishment of the FTC under cer tain
conditions, such as the full and active support of,

It is through the PROACTIVE LEADERSHIP of
AJCE's younger members in sustaining the YPF that
we now see FIDIC clearly demonstrating its concern
for the future of our consulting engineering
profession. Clearly, the active involvement of ouryounger professionals constitutes an investment in the
future of our consulting engineering industr yworldwide.

・The national FIDIC member association (CNAEC).
・A nationally respected university (Tsinghua
University).
・The country's national government.

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AJCE Newsletter March 2004

Part of the discussion also involved a realization that
China represented nearly 25% of the world's
population. The FIDIC Executive Committee also
concurred with the intent to open the training center's
programs to participants from other countries andalso requested that there be no financial obligation on
the part of FIDIC. All of these conditions were met
and in early April 2001, the FTC Training Center was
inaugurated on the campus of Tsinghua University.

As part of this effort, the government has begun tomove on the establishment of a graduate degree
program related to engineering and construction
project management. Since Tsinghua University has
been designated to be included in the early
establishment of such a program, the FTC is wellsituated as this program begins to move. This
presents an excellent opportunity to infuse FIDIC's
principles into the program.

THE FTC TODAY
Since its establishment, the FTC has conducted six
senior one week training sessions. These training
sessions have been directed towards the tools needed
to develop and/or improve the attendees skills inengineering management to include project
management and program management. The subjects
covered have included subjects such as The Global
Market, Leadership and Management, ProjectManagement, Program Management, Sustainable
Urban Development, FIDIC Conditions of Contracts,
Organization of Consulting Firms, Ethics, Numerous
Project Experience Examples, etc.

Another challenge awaiting the FTC is the opening of
its courses to participants from neighboring Asian
countries to truly make it an international training
center. It is on this matter that I see the possibility of
the FTC and the YPF working together. The FTC's
focus is on providing engineering management
training for our younger practitioners, whereas the
YPF focuses on bringing our young practitioners
together on a worldwide basis. I firmly believe thatsomewhere in all of this lies a very good match.
CLOSINGThe beginning of the Year 2004 will mark three yearsof operation for FIDIC's YPF and the FTC. The
continued existence and activity of both the YPF as
well as the FTC training center clearly demonstrates aproactive leadership on the part of our industry, and iscertainly a very positive reflection on the leadershipof both AJCE and CNAEC. The success of both isabout the combined effort of many in providing
leadership and being proactive to improve ourindustry - a new level of capacity building.

THE FUTURE
The future appears to present a number of exciting
opportunities and challenges. One such opportunityand challenge relates to the FTC. The Chinese
Government recently decided to actively promote
training for engineering design, consulting, andproject management.
China's market has become a very large world market
in which Chinese companies increasingly need todemonstrate knowledge of and use of internationallyaccepted business practices, both in the local as wellas international marketplace. In addition, foreign
enterprises entering the Chinese market are also
looking for knowledgeable local talent.

This new level of capacity building is not just aboutbuilding basic capacity, but rather about elevating theprivate practice of engineering to a level where
consulting engineers are increasingly recognized as
leaders and creators of wealth in society.

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AJCE Newsletter March 2004

Growing PFI/PPPs Market and Its
Implications for Design Firms inJapan

Yuuichirou YASHIMAPACIFIC CONSULTANTS CO., LTD.
Chief of PPP / PFI Department

1. PFI / PPPs: Global trend and the present
condition in Japan
Since the legislative and administrative fiscal reforms
were carried out by the Thatcher administration in the
1980s in the United Kingdom, the global trend has
been toward smaller governments and privatizing
public sector.
As part of that trend, Private Finance Initiative (PFI)
was introduced in the U.K. in 1992. Since then, thePFI format of utilizing private capital and expertise inproviding public services (PFI is often understood asa specific form of Public Private Partnerhsips or"PPPs", which comprise variety of contractual andcollaborative partnerships) as same as other similar
methods mobilizing private resources in many
countries) has been recognized as a highly effective
method by the governments of many nations seriously
tackling fiscal reforms (Table-1).

Table-1 Major Sectors in the International
Development of PFI /PPPs
CountryJapan

Major sectors developing in PFI /PPPs market
Healthcare, accommodation, IT and transport
at the regional level
FinlandRoad concession (shadow toll), School andhigher education
FranceAuto-route concessions (real toll)
Water concessions
GreeceRoad concessions (real toll),
Thessaloniki light trail
IrelandTransports, Education, Water,
Waste management
Italy
Hospitals, transport, waste management
Netherlands Water, high speed rail link
Portugal
Airports, road concessions (shadow toll)
Spain
Auto-route concessions (real toll)
Regional road concessions (shadow toll)
Australia
Road (Melbourne),
Hospitals (Victoria & NSW)
Prisons (Victoria & West Australia)
South Africa Prisons, water, healthcare & education

In Japan, however, it took some time for PFI to berecognized and implemented in the real world. The
Law enabling the tapping of private money into
public facility development (PFI Law) was enacted in
1999 with the view to enhancing the legal andregulatory infrastructure for PFI financing, as well as
facilitating land lease agreements on public lands inthe context of PFI transactions. During the first few
years since, however, there was some hesitation in
implementing this new scheme, largely due to theinsuff iciency of political commitment to its
effectiveness.
The wind changed when the Koizumi administration
came to power in 2001. Since then, with the central
government prioritizing PFI as one of the major
devices for its reform agenda, PFI has spread fastover the nation. According to a recent government
report, there are about 130 projects, of which about
30 are national and the rest are regional projects

Source: International Financial Service London (IFSL)
Report : Public Private Partnerships:UK Expertise for International
Market 2003

employ the PFI format, not restricting its applicationaccording to the facility type or the nature of theservices provided. Major categories that are expectedto adopt PFI include:
・Waste disposal and recycling, power generation
facilities.
・Tourist facilities
・Logistics infrastructure
・Business infrastructure
・Mobile telecommunications facilities
・Toll roads
・Public housing

The PFI Law allows wide varieties of projects to
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AJCE Newsletter March 2004

・Public parks (nature preser ves, urban park
facilities)
・Roads and highways (urban redevelopment)
・Museums and other cultural facilities
・Sports and recreation facilities
・Public cargo handing facilities
・Government offices

The basic framework of a PFI project in Japan
involves the selection by a government agency(national or regional) of a private entity - often an adhoc consortium -- that would be commissioned,
through a due process of tendering and contract
negotiation, the responsibility for the project
implementation usually including design,
construction and operation of the property. Major

Policy Framework Decisions
Project
Definition①Identification of Candidate Project(s)②Determination of Implementation Outline③Examination of Project Format④Defining a PFI Path for the Identified Project

Supplier
Selection⑤Invitation for Proposals⑥Submission of Proposals⑦Proposal Evaluation and Selection of Supplier

Contract
Negotiation⑧Negotiation / Contract

Implementation⑨Public Announcement of the Result⑩Implementation (Design/Construction & Operation)

Project Completion

Figure-1 Project Flow of PFI Source: Based on"PFI"/Economic Planning Agency, March 1999

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AJCE Newsletter March 2004

2. PFI / PPPs: Roles of design firms andincreasing business chance
The traditional mission of design firms is to provide
engineering ser vice and technical advice to a
construction and/or development project. Following
this tradition, design firms in the U.K. have played
key roles in each and every phase of major PPP/PFI
projects (see Table-2 for example). Similarly, there
are a number of Japanese design firms that have
served for overseas BOT/BOO projects that precede
today's PFI/PPPs.

stakeholders and the relationship between them are as
depicted in Figure-2 below.
To maintain the efficiency and effectiveness of thisscheme, advisers for the public sector clients aredemanded to have abundant knowledge and expertiseto complete their duty. They are expected to optimize
the implementation process by supplying right inputs
to the client and the private candidates at the righttime, while giving fair consideration to public goods
and private benefit.

Financial institutions

Directagreements

Project
contract
Public sector

The project vehicle
Proposals,
adviceProposals,
adviceConstruction
contract

Creditcontract

Management andmaintenance contract

Insurance
contract

Adviser

Construction companies
Management companies
Other Equity Investor

Funding
Consortium

Insurers

Figure-2 PFI scheme Source: same as Figure-1

Table-2. Roles of Design Firms by Project Phase in Second Severn Crossing ProjectStage
Project Identification anddefinition
Procurement

Implementation

Orderer
Design Firm
Department of Transportation G. Maunsell & Partners,(DoT)
W.S. Atkins
Special Purpose Company
Sir William Halcrow &(Laing-GTM)
PartnersSEEE(France)
Special Purpose Company
Percy Thomas & Partners(Laing-GTM)
Design Consultant
Gifford(Halcrow-SEEE)
Department of Transportation G. Maunsell & Partners,(DoT)
W.S. Atkins
Special Purpose Company
SGS Environ-ment(Laing-GTM)
Special Purpose Company
Sir William Halcrow &(Laing-GTM)
PartnersSEEE(France)
Design Consultant
Gifford(Halcrow-SEEE)

Source: Based on Investigation of Japan Civil-engineering Consultants Association (2001)

15

Role
Agent
Design Consultant
Consultant(Architect)
Independent Checker
Agent
Independent Officer ofEnviroment Liaison
Design Consultant
Independent Checker

AJCE Newsletter March 2004

commissioned monitoring and evaluation of the
project company's performance for assuring thequality of each project.
As mentioned before, design firms may work for theprivate entities entering PFI/PPP tenders: in suchcases, they may play a corresponding role with theircounterpart on the public side, or, even join aconsortium - e.g., as the bidding group's designer
and/or operator -- with some equity positions.

In general, design firms can play a variety of roles fordifferent entities in the different phases of the
PFI/PPP process: i.e., they can play a key role for a
public entity during the procurement process, as well
as a similarly important role for the nominated private
entity during the implementation phase.
At the project identification and definition stage,
design firms, as independent engineering consultants,are expected to help public clients in identifying rightprojects from a viewpoint of public utility andurgency, executing feasibility studies, and inconsolidating basic facility plans. Or they may choose
to work for interested financial institutions and otherprivate clients, giving market and project reports,
assessing project risks and returns, and preparing
business plans to anticipate their competitors intaking advantage of the growing market.
At the procurement stage, design firms can provide
various engineering services from drafting of bidding
formats to evaluation of submitted proposals, while atthe later, contract negotiation stage, they provide
technical services necessary for a solid PFI/PPP deal
as well as its relevant financial deal, in order tosecure the project's smooth implementation. In
addition, Japanese design f irms often take a
mediating role between the public agent and theadvisors of other professions (i.e. legal andfinancial/accounting). Finally, at the post-contract
implementation stage, design f irms are often

The brief overview above indicates that design firms
are expected to fully demonstrate its expertisethroughout the process from the preparation to thematerialization of PFI/PPP projects. Their abundant
experience as engineers in social infrastructure
projects and their close, historically-developed
relationship with public sector, as well as theirneutrality as independent private entities amounts toqualify good design firms as a indispensable player insuccessful projects. It means that, with the growing
PFI/PPP market, design f irms are now facing
remarkable opportunity to expand their businessscope, not limited to its traditional role providing
more or less purely technical services to public sector
clients. In addition to the enhancement of their roleon the public side, they now can see private entities
and financial institutions as potential clients, waitingfor high-quality services that only good design firms
can provide.

Table-3. Project Phases and Assumed Roles of Design Firms in Japan
Project Phase

Role of Design Firms

ClientPublic Sector

Private Sector
Consortium
Financial
Project Vehicle Institutions(i) Project Identification Phase
Project Proposals
Feasibility Study
Defining a Specific PFI Project(ii) Procurement Phase
Invitation for Proposals (IFPs)
Evaluation of Submitted
Proposals

Project Finding Study/Survey○

Feasibility Study of Candidate PFI Projects○

Support for Outline Business Case/Facility Planning○

Public Announcement of Outline Business Case

○

○

○

Project Proposal Development○

Risk Assessment and Bankability Check
Drafting Bid Material Formats○○

Supporting Evaluation of the Proposals(iii) Negotiation/Contracting Phase Proposal Evaluation, Support for Negotiation with
Selection of the Best Proposal
Private Sector
Negotiation / Contract
Support for Negotiation with Public Sector(iv) Implementation Phase
Detailed Business Planning
Execution of the Project○○○

Facility Planning and Design○

Construction Management○

Performance Monitoring
Support for Managing Project Schedule and Cost
Source: same as Table-2

16○

AJCE Newsletter March 2004

3. PFI / PPPs: Road to leading professional
service firm
One of the unique aspects of PFI procurement is its
extensive use of output specif ications andperformance monitoring as the chief device formaintaining the effectiveness and appropriateness often referred to and quantitatively presented as VfM(Value for Money) -- of the private-led publicprojects. In such context, consulting engineers are
required to have, more than anything, professional
technical abilities to build an appropriate projectframe that enables optimized Life-Cycle Cost (LCC)
planning and risk transfer.
Furthermore, with the essential shifting of weightfrom construction of public facility to supply of
public services, require corresponding changes in therole of design firms. The new requirement includes:a. Widening the perspective from that of a traditional,
design-oriented servicer to a broader one, in order
to cover the entire body of a projectb. Gaining professional expertise and knowledge infield that has not been covered before, such as
market forecast, procurement by output
specification, project management, etc.
c. Play commercial roles in building up consortiums
and risk-taking businesses
In spite of the drastic reconf iguration of public
service procurement and implementation under the
PFI/PPP scheme, the priority remains unchanged: thesignificance of the projected service for the taxpayers.
Considering this point, design firms stand in the most
preferable position to bear the leading role in PFI/PPP
projects - at least in Japanese context - against othertechnical advisors such as accounting and legal firms,
who are not fully qualif ied to take the highlyinterdisciplinary responsibility. The current competitive
advantage of leading design firms in Japan, over theprominent global accounting firms in the domestic
PFI/PPP market may underwrite this notion.

From another point of view, it means that design
firms in Japan are now required to play a syntheticrole in the newly-opened market of PFI/PPPs,
integrating responsibilities that have been separately
borne by technical, legal and financial /accounting
advisors, in order to maintain and to enhance its
competitive advantage and to survive in the evershrinking market of traditional public works.
As legal advisers, design firms should be equippedwith sufficient ability to control, with necessary
supports from professional legal firms, the relevant
legal procedures including:a. Putting down the project scheme to a legallymanageable long-term contract
b. Clarifying the risk-allocation in the contractc. Building in an appropriate, manageable
reward/penalty system in the contract to ensure
fulfillments of project aims
As financial advisers, design firms should be armed
with tools and skills to draw up business plans as wellas to evaluate them -- especially the expertise in cashflow simulation and assessment. They are
indispensable whoever the client might be, i.e. be it apublic agent or a private entity.
In order to eff iciently take such a synthetic role
involving legal, f inancial and technicalresponsibilities, design firms in Japan increasingly
need to directly employ variety of qualif ied
professionals. It does not necessarily mean thedecrease of the importance of networking withoutside professionals (in fact, its importance isgreater than ever before as well), but the evercomplicating nature of PFI/PPPs projects, as well as
the increasing pressure on speed and accountability,
require design firms to nourish proficient project
management skills, on which ambitious design firms
should put their focus on today. In this sense,
PFI/PPPs opens up a precious frontier for suchendeavor.

<Japan><UK>
Design Firm

Major Accounting Firm

Legal Firm(Think tank)

Legal Firm

Design Firm

Financial Advisor

Figure-3 Examples of Relationship between Professional Advisers in PFI/PPPs

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AJCE Newsletter March 2004

A LETTER FROM AJCE OFFICE
1. Commemoration symposium
The theme of this symposium will be entitled with
"The Challenge to Changing Value, the CE as
Responsible Partner "We will invite FIDIC Presidents
and Professor of university as keynote Speakers.
Together with Panel Discussion will be held todeepen this theme. It is expected to become theenergetic and fruitful symposium, which involved theparticipants of the meeting place.

AJCE 30 years anniversary commemoration
Association of Japanese Consulting Engineers(AJCE) were established in April 1974, and we joinedin FIDIC as a representative of Japanese CE in 1977.
During last 30 years, AJCE have increased number ofmembership and organized several committees
following to FIDIC Organization. AJCE havedeveloped through interchange with FIDIC and CE offoreign countries in order to develop their activity ofJapanese CE. Last few years AJCE have been
participating in the committees of FIDIC as well andwe support the worldwide activities of FIDIC.
Now, AJCE have the 30th anniversary in April 2004
this year. Taking this opportunity we expect to receive
more support and powerful cooperation from ourmembership for further development of AJCE and
FIDIC including foreign countries MA. At thismoment, we are special thankful to everyone related
to AJCE and FIDIC and we want to explain about
outline of the 30 memorial event. It is three of thefollowing to become the pillar of this event.

2. Commemoration Party
We are pleased to hold a memorial ceremony to invite
FIDIC Executive Committee Members and all
membership of AJCE, in addition to representativefrom Government Offices, Friendly Associations, andInternational Organizations.
3. Commemoration Book of 30-years History
It is described the details of the AJCE establishment,
joining to FIDIC, and the interchange with theforeign countries MA and the expansion of theactivities range summarize history included to thememorial event of this year.
We intend to report in the next issue of our News
Letter on the details of these events to ask you thegood memory of AJCE.

18