Rebuilding Kosovo

Well, they did all rush at once - representatives of as many as 250 construction related companies from all over the British Isles converged on London to hear a de-briefing by the British Reconstruction Task Force, in Kosovo.

The delegates were spurred on by the notion of prizes that lay ahead for those who managed to get an early foot in the door.

But what has become clear is that the waiting continues - and that no one yet knows whether those who successfully pitch for the work are more likely to gain kudos rather than cash.

Delegates were all ears at the debriefing exercise on Thursday 1 July when task force leader Nigel Thompson assured them: "Those who work in Kosovo initially will gain the necessary experience needed for longer term projects."

Unsurprisingly, they remained attentive even as they eagerly filled in questionnaires declaring their interest in pitching for deals to patch up that war-torn area.

Now, however, the hard-headed business reality is dawning: The British Task Force surveyed only the British military sector of the province and the analysis of need may be entirely different once a European Union task force makes its assessment of the entire region.

And even as the Army sets about finding and clearing the hidden mines in Kosovo there are still too many imponderables for anyone to regard this moment as a Klondyke-style gold rush for the construction industry. For instance:

n Unknown - Who is in charge? The task force has pointed out that as yet there is no governing body in Kosovo to co-ordinate the reconstruction process. Serbs, who during the war had taken over major areas of administration, including utilities, have now fled, leaving machinery to go to ruin.

In the words of Bruce Russell, deputy chairman of the Export Group for the Constructional Industries, "The major problem in Kosovo is the lack of administration. So far all the utilities are run solely by the British Army."

n Unknown - What materials exist in Kosovo? The MoD has already approached plant manufacturers to come up with plans for processing aggregates, but there are worries about the local sourcing of more complex components, such as parts for water and power stations which need upgrading.

Even some companies in neighbouring Macedonia are unaware of the extent of the supply problem. Jordan Shikoski, assistant general manager of electrical and engineering company EMO in Ohrid, which has a workforce of 3,000 working out of 25 depots in Macedonia, tells CJ: "Some tasks we can complete ourselves, but we may have to turn to England for some materials. We can build the structures, although we have not yet been able to assess what materials are required."

Certainly, many UK supply companies are unlikely to be needed, according to Metal AB, a top construction firm in Skopje. General manager Saso Dzikosky tells CJ that he foresees a need for help from UK construction firms largely in areas of management, marketing and finance consultation, "but Macedonia produces almost 100 per cent of materials needed by construction firms, which before the war was supplying not just Kosovo but the whole of Serbia.

"Macedonia has 4,000 construction workers, including bricklayers, carpenters, re-inforcement workers, with another 6,000 craft workers, including locksmiths, plumbers, welders and electricians, plus another 4,000 contract engineers and architects."

An interesting aside is that although his firm had not yet received approaches for partnering on projects he expects the bulk of them to come from Germany.

This self-sufficiency in building materials is borne out by Ljupco Bebic, business development manager of cement manufacturer Cementarnica Usje based in Prvomajska, Macedonia, which has a million tonne capacity. He points out that last September both Holderbank from Switzerland - the world's biggest cement producer - and Titan from Greece acquired 86 per cent of his company's equity. "With maximum support coming from two strategic investors we are completely able to overcome any serious operating problems and supply cement in both the domestic and neighbouring markets."

n Unknown - How do companies seeking to partner with Macedonian contractors actually go about it? Only now has the Crown Agency devised plans to set up a procurement office in Skopje. One of its agents, Tim Newman, arrived in Tirana, Albania, to set up an office, to deal with a programme of Japanese Government aid for Kosovo. Meanwhile attempting to find Balkan firms with which to join forces can prove disastrous. (See panel p17).

n Unknown - How much are individual packages worth? The task force has stipulated that there will be no price tags put on projects until all the tenders are in.

Harold Freeman, of HM Treasury, told delegates at the conference: "We have set up a stability pact which provides political agreement with all countries and regions involved. We need fair, transparent, and clear guidelines for financial transactions, including tender awards." In other words, even he is in the dark.

Unknown - If the ultimate plan, as expressed by the taskforce, is to replace all the old outdated technology in Kosovo with new, exactly who will foot the bill?



What is known, however, is that some contracts are off the menu, such as bridges and houses. The region's bridges, though completely destroyed, are simple enough to be replaced by Baileys until such time as local industry substitutes them. Houses are already being repaired by the Kosovans themselves using local materials and housing kits donated by neighbouring countries.

According to Dr Mukesh Kapila of the humanitarian aid agency DFID. "Come 15 October every Kosovan will have electricity, water, a roof and heating."

On the menu in the immediate sense are temporary field accommodation, water pumping stations and electric power stations and transmission pylons - a first tranche worth £19.5 million. On the menu in years to come is more than £500 million worth of work bringing Kosovo into the 21st century.

But with so many imponderables, even those who are keenest to start the real-life version of that popular computer game Sim City in places like Pristina, Kosovo's capital, are now waiting and watching.

Gibb, the Berkshire-based international consulting engineer is already well-established in neighbouring countries like Macedonia, Romania and Bosnia and therefore has high hopes of getting involved in the waste water and power sectors in Kosovo.

But Peter Teeton, technical director of Gibb, says: "The DTI has done a very good job in analysing the potentials but I still feel it is too early to know the full extent of the work."

He is expecting extra work on existing projects in Macedonia and hopes that eventually Gibb would get involved in the improvement of Kosovo's highways much later in the reconstruction programme.

However, says Teeton, "at the moment Kosovo is in limbo and there is no substantial aid. What is needed there is a sovereign government."

Also well-established in the region is water engineer Montgomery Watson, but Peter Laurence, its representative at the briefing, says of Kosovo: "I don't see it as a big market at the moment." He adds: "We have someone in Kosovo doing work with Oxfam but it may well be that he will extend that by supporting the DTI with advice. For the moment all that we can do is wait and watch."



Like him, Ian Rylett, director of business development at Balfour Beatty, can do little more than declare eagerness to help and keep a watching brief for suitable - and workable - contracts. His organisation, like many massive players is, in a sense, overqualified. "We are looking for an opportunity to contribute, one that is suitable for our size. Repairing taps, roofs or replacing windows is not something we would do.

"Initially projects in Kosovo would fulfil short term emergency needs by way of temporary housing and running repairs on utilities such as water and power and the DTI is looking for assistance in the management of utilities and infrastructure.

"The kind of temporary housing for which Brown and Root has been shortlisted is not the sort of thing for which we would bid.

"We are going to do something. Our core strengths are in infrastructure, roads, power, bridges and major civils.

"There are no major civils required. There was very little damage to Kosovo's roads and only five relatively small bridges were damaged and can be replaced by local structures. It is not as if there is a 500m span which needs rebuilding."

John Beechy, technical director of consulting engineer Babtie, says: "We are very interested in any opportunities that may arise, but it is not quite clear how it is going to develop. Methods of procurement don't seem to be very clear. We have to make the judgement about whether the likely reward justifies the output required. We need to understand the extent of the damage and develop a strategic plan to address the issues."

There was much talk about "leaping a generation" of technology in order to bring the existing backwards technology in Kosovo up to date.

"That was easy for the task force to say but where we find the money for that investment will have to be addressed. I don't think anyone knows the answer to that yet."

It's hardly surprising that there is confusion about the procurement process. The Department of Trade and Industry says: "The picture isn't entirely clear until the first donor conference on 31 July which will concentrate on immediate humanitarian aid. In October there will be an intermediate donor conference looking at medium-term needs, with a third conference early next year to look at long term investment.

"But donor conferences' pledges will come from the World Bank, the European Bank for Reconstruction and Development and bilateral aid offered by individual countries.

"Until that money is pledged things are on hold. What happens next depends on estimates of need.

"Once pledges of money are in we are advising companies to keep an eye on our website to find out what happens next. (See key contacts panel, p 15). There will also be hyperlinks to the World Bank and various European Kosovo sites."

There is other evidence that things are moving. The British Consultants Bureau has just announced that up to 250 technical experts will be needed, mostly from the private sector, on secondment for up to two years to the EU Agency for the Reconstruction and Development of Kosovo.

Meanwhile, many of those who rushed all at once will now be waiting for the right moment, the right project - and the right information.