TBC Facility Management

Major Overhaul of the Delivery of Facilities Management Services

for the Public Education Sector

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Introduction

Abdulaziz Al Omair – Vice President Facilities Management Tatweer Building Company (Facilities Management)

-- Driving a 360 degree change in the way Facilities Management is delivered to the public schools portfolio across the country (from Operations & maintenance to Integrated Facilities Management)

- Allowing the MoE to carry out it’s core function of educating children in a safe and pleasant environment

TBC - Facilities Management

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- Current Status of MoE Schools

- FM Supply V FM Demand

- Why Change?

- TBC Digitalization

- TBC FM & the SME

- Any questions

Agenda

Today, public school education is delivered through ~30,700 schools hosted in ~23,100 buildings across the Kingdom

Overview of KSA education sector (2016)

~23,100 Public

School Buildings

Central Region

Northern Region

Western Region

Eastern Region

Southern Region

1.8 K

5.6 K

5.6 K

2.3 K

~30,700 Public

Schools

9.5 K

7.7 K

5.9 K

2.4 K

8.1 K

3.0 K

Public School Distribution 23,100 Public School

Buildings

~30,700 Public

Schools

~5.05 Mn Public

Students

26%

Intermediate

Primary44%18%

5%

Kindergarten

7%

Literacy

HighSchool

48% 52% GirlsBoys

Shared

31%

Independent

69%

Rented

25%

Gov. Owned

75%

Current Status

536 1533 10 434144442 821 9 24 23 283541 37 2620 2527 1132 313434031274530222939171816381 19 126

Almost 50% of the overall public school are concentrated in 8 out of the 45 MoE’s Districts

School FM contracts geographical distribution

25% 25% 25% 25%

Under tender Ongoing contracts

ID Districts

1 Riyadh

2 Alaflaj

3 Alhouta and Alharik

4 Alkharej

5 Aldawadimi

6 Alzalfi

7 Almajmaat

8 Alqouyaiyat

9 Afif

10 Wadi Aldawaser

11 Shaqra

12 Alghat

13 Makka

14 Alqonfoda

15 Allayth

16 Jeddah

17 Taef

18 Madina

19 Alola

20 Almahed

21 Yunbu

22 Qassim

23 Aneira

24 Alrass

25 Albkairat

26 Almozanab

27 Eastern Province

28 Hafer Elbaten

29 Alihsa

30 Asir

31 Bisha

32 Rijal Alma

33 Sarat Abida

34 Mahayil Assir

35 Alnamas

36 Aljouf

37 Alqoryat

38 Jazan

39 Sabya

40 Albaha

41 Almekhwat

42 Tabouk

43 Najran

44 Norther Border

45 Hael

Current Status

50%50%

The KSA’s school FM supply is highly fragmented, with ~215 contractors

School FM contractors market shares

21

55

List ofSuppliers

20

5

19

5

18

5

17

5

16

5

15

5

14

5

13

5

12

5

11

5

10

5

95

85

75

65

55

45

35

25

15

Total number of contractors

16

Source: TBC analysis

• 50% of the market is concentrated in 16 large contractors

Total number of contractors

~200

% of buildings contracted

~55%

• The remaining 50% of the market is highly fragmented, with almost 200 contractors

% of buildings contracted

~45%

Current Status

The FM supply is highly specialized, with only 9 companies contracted across the full value chain, while 85% are contracted in one service only

Service coverage of KSA’s FM contractors

10

20

30

40

50

60

70

80

Cleaning Maintenance HVAC1 1

69

18

36

77

68

No. of Contractors

Suppliers offering multi-services

Suppliers offering specialized services

Comments

• School FM suppliers are mainly offering specialized services in either cleaning, maintenance or HVAC

• Cleaning is noted to represent the highest number of contractors as the market is highly served by labor supply companies

85%

15%

Service Coverage

77 companies contracted for cleaning only

Current Status

To assess the FM local capabilities, TBC FM

launched an online survey, using their old

registration system, and collected information

on a total of 100+ FM contractors who operate

across the KSA Region.

Supply V Demand

The output from this survey was analyzed and

plotted graphically to show the key information:

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The majority of respondents are below 200 employees with limited geographical coverage; only 16 contractors exceed 1,000 employees

Summary output of the FM contractors survey

Total of 100+ respondents

Bubble size represents number

of employees

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

120

100

80

40

20

0

60

% of Direct Employment

# of Regions CoveredSource: TBC FM Contractors Survey

Supply V Demand

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Pre Qualification

Once the FM companies register on the TBC System they then go through a pre-qualification process:

When they pass the key criteria then moved to the list of Contractors invited to tender for specific projects

TBC FM is currently working to enhance the registration and pre-qualification portal given the growth in future contracts.

Link: http://cq.tbc.sa:8083/login.aspx

Capacity

• Supplier landscape is very fragmented and includes ~215 facility management contractors across KSA

• Large portion of the market is served by labor supply companies

• Remote areas are significantly under-served

Technology• Technology is not frequently adopted by contractors to improve efficiencies and reduce costs

• BMS is not available in schools

Service Quality

• Best HSSE practices are not commonly used at site as only safety boots and uniforms are adopted

• Service quality is sometimes sacrificed and contract requirements bypassed by contractors to increase profit margins

• Service quality and response time are not uniform across contractors

Capabilities and Resources

• Expertise in offering integrated facility management services is limited only to few contracted FM suppliers

• Most tier one local FM suppliers do not participate in MoE bids due to: low bid price, low margins, competition with companies using low skilled labor, delays in payments, condition of the facilities

• Capabilities and qualifications are not uniform across contractors

• Limited financial stability is affecting service quality in cases of delayed payments

• Limited capabilities and resources are restricting the ability to source funding

A number of challenges were identified from the supply standpoint

Facility Management challenges – supply standpoint

Current Status

Why move to Facilities Management from operations & Maintenance?(the 7 it’s)

Why Change?

It's not just about cleaning and maintenance

- It’s about the whole lifecycle of the school, not just fix and make do

- It’s about the use of technology

-It’s about working to reduce long term costs, including energy efficiency

-It’s about developing the FM Contractor’s as a “partner”

- It’s about introducing performance based contracts and risk transference

- And it’s about setting new standards for Saudi Arabia

Research has been undertaken to prove a direct correlation between school environment and school pupil achievements.

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TBC is best-positioned to take over FM through its strong management capabilities and technical expertise

TBC Facility Management Value Add

Time-efficient tendering

Strong management capabilities

Strict contractors pre-qualification

Flexibility in contract management and payment mechanism

Strong oversight capabilities to support MoE

Why TBC

TBC FM journey will be in 3 phases

Time0 – 1 year 1 – 3 years 3 – 5 years

Wave 1

The Transformation Program

Wave 2Wave 3

Set-up FM Business Expand and Improve Achieve Best Practice

$

OK!

Service request closure

Preventive maintenance closure

Rework

Percentage of reactive maintenance

Cost efficiency

Injury incident rate

Customer satisfaction

Development & Implementation of KPI’s

Example KPI’s

Enhance Service Delivery

Components of TBC FM digitization

Business Intelligence and Governance

Computer Aided Facility Management (CAFM)

BuildingManagement Systems

1 2

3

TBC FM Digitalisation

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There is a large number of small and medium (SME) facility management contractors in KSA

KSA Contractors (In ‘000)

Total KSA Contractors

206.0

KSA FM Contractors

96.3

Categories of FM Contractors

41%Micro1-5 FTEs

55%Small

6-49 FTEs

Large250+ FTEs

3%

Medium50-249 FTEs

0.3%

SMEs

Source: Ministry of Commerce and Investment

TBC & The SME

However, small and medium facility management providers suffer from several issuesChallenges of Small and Medium Facility Management Companies

Lack of stable contracts

Limited Service Quality and Offering

Lack of Capabilities and Resources

Lack of Financial Resources and Limited Funding

Limited Use of Technology

TBC & The SME

The FM sector development initiative is expected to provide several benefits to the Saudi economy

FM Development Program’s benefits to the Saudi economy

Develop the private sector

Favor business cultural change

Enable technology and know-how transfer

Improve schools conditions

Contribute to the Saudization program

OK

!

FM Sector Development

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TBC Schools

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