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Developing professionalism for housing maintenance management in by 3a5jEc3

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Developing professionalism for housing maintenance management
in the Baltic States
Project application for the Grant by Nordic Council of Ministers




Context

      Until very recently, designers of buildings and advisors for the property owners have focused their
      main attention on capital costs, paying little heed to the need to forecast and reduce maintenance
      costs. Yet over the life span of a building, maintenance and repair costs may be 2 or 3 times the
      initial costs. Moreover, the costs for maintenance are growing in relative importance for many
      building owners, but especially for the local authorities and Housing Associations.

      All the households of the ECE countries, incl. these in the Baltic States, who have privatised their
      dwellings in the multiflat blocks dating back to the soviet period face the problems of affordability.
      Quite often, in several reports it is stated – massive home-ownership is not affordable in the
      previously built up housing stock! Though the housing stock is privately owned and the flat
      owners or homeowners are responsible for the running costs of their homes, there is still the
      heavy burden for the society as well. Since too many households require different housing
      allowances and neighbourhood renewal projects require considerable investments to be done by
      the authorities.

      After privatising the housing units in the Baltic States, but greatly the whole housing stock, there
      have been several pilot projects where different Nordic companies have carried out housing
      renewal projects aiming to increase the energy-efficiency of these blocks. These pilot-projects
      based on the best experience have been followed up by local companies and by activities initiated
      by the home-owners associations (HOA). Step by step banks have proposed credit possibilities for
      the HOA-s to refurbish the privatised blocks. These projects that have been based on improving
      the energy-efficiency of these buildings and reducing the heating costs for the households have
      been successful as to the targets stated. Though, relative reduction of heating costs has not
      always be followed by any improvement of the affordability for the households and the newly
      refurbished buildings are not maintained properly.

      'Maintenance' as the term was fully missing from the professional terminology during the soviet
      period, but not only. Even today maintenance is rather equalled to restructuring or refurbishing,
      and the maintenance activities are equalled to these carried out only by a common dustman.

      Any structure of a building or a system of utilities requires relevant maintenance to be planned
      and carried out there. Correspondingly not only the originally installed and currently ageing
      structures (built during the soviet period or even earlier), but especially the newly refurbished or
      restructured or reinstalled finishing, structures, but especially systems for engineering services
      would require planned further care. Several surveys that have been done give the evidence, that
      households and the HOA-s quite often reduce their housing costs avoiding any maintenance to be
      done there. Only the emergency maintenance is inevitable, but this is always relatively more
      expensive as doing the preventive and routine maintenance works.

      This attitude to the problems of maintenance gives only short-term political profit - the
      affordability level of the households is improving and this gives excellent political arguments for
      the politicians highlighting the benefits of 'cheap' self-maintenance. At the same time this attitude
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      to maintenance reduces sustainability both for the households, but also for the society in general.
      Dwellings lacking normal maintenance will burden the next generations with much higher costs
      when running the housing stock, both on the society level, but also on every single household
      level.


Objectives

      The three Baltic States have had similar history and there are several sectors of economy where
      the main activities and results are quite comparable. Life-stile may differ slightly, but the
      traditional housing has similarities starting up with the wooden cottages, or the brick and natural
      stone structured houses in the medieval cities. And the soviet period stony-cities and concrete
      housing estates have several similarities as to planning these neighbourhoods or developing the
      blocks there.

      Though the privatisation processes of housing stock has been slightly different in the three Baltic
      states and currently the organisational forms of managing this stock differ, the targets are greatly
      the same ones. All this housing environment requires professional and cost effective maintenance
      management to be organised, either carried out by professional maintenance companies or by
      HOA-s. The methods of planning the maintenance works should not depend on the legal and
      political framework, rather we have to speak about the professional field of activities where skilled
      managers and operatives are required, but also relevant and adequate information systems are
      required.

      Recently, on August the 2nd in Jūrmala (nearby Riga) the representatives of the professional
      associations for housing maintenance of the Baltic States signed the contract for strategic co-
      operation for the period of 5 years. (The 3 copy of the contract signed in Russian is enclosed) On
      the joint workshop the potential partners reported about their everyday activities and about their
      interests as to improving the activities in the sector.

      Based on the contract for co-operation, the aim of the current project is:
      to study the most effective methods for housing maintenance and implement the
      most transferable of these for the national housing markets preparing the basic
      principles for the Baltic housing maintenance standard and starting introducing these
      principles in everyday practice.
      Specifically, the objectives are to:
           study, analyse, understand and benchmark the current practice of maintenance for
               housing
           produce the state of the art reports and recommendations for the future
           carry out national studies analysing the need for maintenance and assessing the critical
               aspects there
           review the alternative scenarios as for institutional framework for the maintenance
               organisations role on the national markets and to propose the appropriate legal
               requirements for these
           promote actions for development the international and national regulations and standards
               on maintenance planning, but also on facilities management issues
           rise the awareness of all the stakeholders of the construction and property sector as for
               the maintenance issues and their role there through promoting the concept for life-cycle
               costing
           prepare suitable maintenance based managerial tools (standards, procedures, contracts)
               to guarantee reliability centred maintenance methods to be used for different types of
               buildings
           generate and experiment the teaching and training programmes for professional
               maintenance managers and skilled on-site operatives with the relevant critearia for
               professional qualifications
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             promote the implementation of systematic maintenance principles and their methodology
              into investment planning and decision making of the housing sector and built
              infrastructure
             promote internationally the (Baltic) national cases of best practices analysing the positive
              and possible negative consequences of these

      Therefore the aim of the project is to discuss, generate and to promote maintenance
      management development processes on the national and European (EU) scenes, which will
      hopefully continue in longer perspective after the project is disseminated.

      The project is not targeted to promote any political priorities looking for improvement of the
      affordability level through cheaper maintenance, rather trying to look for the most effective
      schemes for housing maintenance in the Baltic States and doing the first steps when
      implementing these schemes in practice.


Background for the project

      In Estonia, work to identify the maintenance related issues was launched already in 1999 when
      the first contract of mutual interests was signed between the two partners – Tallinn Technical
      University and the Estonian Facilities Administrators and Maintenance Professionals (EKHHL).
      Insufficient performance provided by the housing management and maintenance companies
      required precise identification of the targets. Also new principles for professional and vocational
      training were required. Due to extremely high ratio of home-ownership (93%), the principles to
      manage the properties should be understandable for the majority of the citizens as well – in-
      house management is still quite popular amongst the small property owners.

      The co-operation of the parties that were involved in the project resulted when the Estonian
      National Standard for maintenance activities was adopted – ‘Estonian Standard of Guaranteeing
      the Activities of Facilities Maintenance’ EVS 807:2001 (Eesti Vabariigi Standard – Standard of
      Estonian Republic).

      Acceptance of the Standard (EVS 807:2001) at the end of 2001 became an important yardstick
      for the construction and property sector, but especially for the housing maintenance related
      professionals. When developing the project there have been the three major inter-related stages
      there:
       identification of maintenance for the national context, and describing the major principles for
          built environment maintenance management, with the relevant professional training needs
          and principles for documentation;
       defining the national standards for professional activities (similarly to UK National Vocational
          Qualifications) in the field for maintenance and launching the system of professional
          certification for individual practitioners, but also authorisation for the companies that are
          providing services in the field;
       compiling the standard for maintenance activities; this stage has been supported by relevant
          handbooks and with a set of forms for documentation when tendering, contracting or running
          any of the maintenance related activities.

      By today (summer 2002), all the very different entrepreneurs (by size and specialisation) are
      provided with the basic tools to implement the standard. The standard has passed the all-national
      consensus discussions and public presentations where the interested bodies had the chance to
      present their point of views as to the topic. When preparing the national standard, also
      international professional literature on facilities management was examined and there were the
      dense cooperation contacts to the Finnish professionals to discover the best practice and
      international transferability aspects there. Information from these reviews was used to formulate
      the step-by-step development of the project, but also the major problems to discuss. At the same
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      time, the proposed system is hopefully flexible enough allowing certain amendments to be done
      in the future and to be adapted for the requirements in EU.

      For a small market like Estonia, the system of standards and handbooks as described above has
      ensured that in a relatively short time these documents have become the basics for the ‘fair
      norms’ in the sector. Based on the experience gained, the following scheme for the project
      management, but also the plan of actions is proposed.




Project management

      The three professional associations as the beneficiaries and the partners being equal when
      involved in the current project.
           LATVVIJAS NAMU PĀRVALDĪTĀJU UN APSAIMNIEKOTĀJU ASOCIĀCIJA (LNPAA)
           LIETUVOS BUTU ŪKIS (LBU)
           EESTI KINNISVARA HALDAJATE JA HOOLDAJATE LIIT (EKHHL)

      These three partners have signed the contract for further cooperation and the current proposal is
      fully based on this contract. For the project each of these associations will nominate two
      authorised persons to be the responsible members of the steering-team.

      The project manager will be Professor Roode Liias from Tallinn Technical University (TTU). His
      professorship is for facilities management and there is the consultancy experience in housing,
      maintenance and facilities management, both – nationally and internationally. (CV enclosed) Since
      2000, TTU and EKHHL have the agreement of good intentions for cooperation and every year
      these two partners have signed the detailed plan of activities for the forthcoming period. Since
      2001 Professor Roode Liias is nominated the honorary member of EKHHL and since 2002 elected
      as the member of the board for the association.

      For the current project the project manager will methodologically prepare the relevant
      frameworks for the national reports, will analyse the works done and will provide the necessary
      consultancy for the partners. Correspondingly, there will be the steering-team of 7 persons.

      Currently there is the problem for some of the partners to use English, due to that the regular
      working language for the project will be Russian (especially on the fist stages of the project). The
      project manager is responsible for harmonising and presenting the necessary output documents
      to the relevant international bodies (for the Nordic Council of Ministers) and for the evaluators in
      English. The project manager will chair all the workshops and will assess the work/reports
      presented by the partners.

      Following this scheme of management TTU will provide the accountancy for the project and the
      cash flow of the grant will run through TTU. The due sums for the partners will be released only
      after the necessary preconditions as scheduled in the work plan and as for reporting are
      satisfactory. The accountancy related documents of the project will be audited by Price
      Waterhouse Coopers Estonia, being the auditor for TTU nominated by the Council of TTU.

      At the same time, the project manager is not going to carry out the routine administrative and
      regular management – this will be entrusted to the Estonian Association currently being the only
      one having the permanent office and staff of the three partners.
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Work plan

      The project, consisting of four major stages, is scheduled to commence at the beginning of 2003.
      All the four stages are preliminarily scheduled for about four months each. Correspondingly, 16
      months will be the planned duration of the project to be completed by midsummer-time 2004.

      The events of the project are classified into the following major stages of activities.

      1.      Descriptive stage where the partners have to study the existing housing management
              framework on their national markets and to identify the major needs for the forthcoming
              periods to assure environmental and social sustainability in the housing sectors of the
              Baltic countries. This general monitoring refers to the assessment of housing situation
              and the maintenance management needs. In parallel to the description of the technical
              conditions of the housing stock, the reports will describe the existing institutional
              framework for housing maintenance. This stage concludes with a technical workshop for
              the steering-teams, preferably in Lithuania.

      2.      Comparative stage will include possible comparative cross-national assessments of
              different tools for housing maintenance on the national markets. There should be a study
              tour for the partners’ experts to any or different Nordic Countries to study the best
              maintenance management related practice there. This stage should come up with a set of
              proposals that should be classified for both - short and long term aims to be gained.
              These aims should address the institutional, professional and technical issues of housing
              maintenance.
              This stage has to be concluded in Estonia with a two days seminar (August-September
              2003) providing a forum, where professionals from the partners and the invited
              international observers can discuss together and draw possible new perspectives when
              preparing and implementing the standard for housing maintenance for the Baltic region.
              The final document of the seminar would be considered as the guidelines for the next
              stages.

      3.      Analytical stage should include detailed survey of the most favourable activities for the
              national markets and a set of first priority scenarios to develop the housing maintenance
              national markets and the relevant management structures. On this stage the partners
              should not only depict their most favourable strategies, but also the schedule for the
              major follow-up activities for the implementation stage will be required. This stage will
              conclude with a technical workshop (in Latvia) where all the partners have to comment
              on their schedules for the major follow-up activities during the forthcoming
              implementation stage.

      4.      Implementation stage will include starting the dissemination process of the results –
              following the prepared schedules of activities, step by step the partners will start
              dissemination of the major actions. These actions should include:
                    preparing the professionally skilled staff for maintenance
                    preparing the wide range of published tools (standards, guidelines) for housing
                      maintenance
                    pilot implementation of the prepared maintenance instruments in the existing
                      structures of the maintenance organisations and on the housing stock

              The fourth stage of the project will conclude with national workshops and/or seminars
              that will be carried out to generate the public awareness to the results of the project.
              These workshops will be carried out on national languages and these events should be
              nationally funded.
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              The whole project would conclude with the presentation for the Nordic Council of
              Ministers about the results gained.



Expected reporting and outputs

      To get the information about the work done, the coordinator shall compile for the funding body
      the following harmonised reports in accordance with the following provisions.

      An inception report
      will conclude the results of the descriptive stage of the project and will be ready for any
      inspection during the two (2) months period after the first workshop has been carried out. This
      report has to:
            give a detailed analyses of the developments on the housing maintenance markets of the
               Baltic States during the recent years of after housing stock privatisation, highlighting the
               major factors for current dis-repair and dis-maintenance and identifying the causes to this
               situation
            define clearly the further aims and objectives as for institutionalising the maintenance and
               the aspects how the current project and the assistance programme in general can help
               gaining them
            set out a detailed plan for further actions of this project and outlining the necessary
               resources scheduled in time for the rest of the periods

      The mid-term report
      will be based on the results of the comparative stage seminar and will be presented for the
      funding body two (2) month after the seminar has been carried out. This report should distinguish
      between the activities achieved and considered finished and activities currently under way, so
      that the evolution of the project and the input of any of the partners will be clear enough.


      The final report
      will be submitted for the funding body and shall include also the financial analyses of the project,
      but shall present also the critical study of any of the major problems which may have arisen
      during the performance of the project.

      The final output documents for the whole project will be the following ones:
          a book in English 'Housing Maintenance Management in the Baltic States'; the book will
              describe the development of the project and the major outputs gained and describing the
              best practice on the national markets
          national documents and reports on the national and/or Russian languages that will be
              used for the follow-up process of the project on the places


      All the three (3) reports listed (inception, mid-term, final) will become the subject for evaluation
      by the experts nominated by the relevant national ministries and departments responsible for
      housing and maintenance. After the project will be launched the project manager together with
      the partners will negotiate the responsible ministries about nominating the most competent
      executive officers to become the evaluators for the reports.



Funding the project
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Firstly, it is important to explain and highlight the basic concept when compiling the budget for
the project. The three basic professional partners are NGO-s and their cash flows are based only
on membership fees, but also on possible grants received. These associations have no any
government subsidies or permanent grants available. Correspondingly there are no any own
sources, rather only additional funds that may be attracted to or applied for the project later on
when the project will be actually launched. In fact, most of the deadlines by any of the national
application schemes are normally scheduled for late autumn. The project manager is planning to
cover his own 10% funding from the research grant by the Estonian Science Foundation. The
average percentage for funding from own sources will be 16.

Secondly, in the detailed budget the work plan is split into nine (9) separate and relatively well
measurable actions with the breakdown of the costs by the partners and by the major cost items.
This will help anybody to understand the best way the current intentions, but also if the
application will be successful, to manage the cash flow the most reasonable way.

The nine actions can be classified the following way:
        analytical work and report-writing (actions 1, 5, 6, 8)
        organising workshops and seminars (actions 2, 4, 7, 9)
        study tour (action 3)

Some general comments as to these major groups.

Analytical work and report-writing

These are the actions where the share of salaries is relatively higher. These costs for personnel
(salary plus all the relevant taxes) are included in the following three items:
     administration costs - as described in the chapter for the project management, the
         work to administrate the project will be transferred for EKHHL
     technical costs - also the technical work related to doing the 'dirty' work in relation to
         the project
     experts' costs - includes the work of the project manager, but also the work of the
         evaluators nominated for the project; as for TTU and EKHHL they work greatly jointly
         when preparing the reports and publications, but also when doing the necessary
         translation of the reports; in the case of Latvian and Lithuanian partners this cost item
         includes the work done by the local professionals in charge for the project

Overheads are calculated as 20 percents from the three salary-related costs listed above.

All these four actions include also the costs related to different publications and reports. All the
activities include the item consumables (costs to guarantee the project related everyday
activities). There are the specific printing costs planned for the action 1 to prepare the pamphlets
about the forthcoming project in English and in all the national languages to be distributed for the
relevant institutions when promoting the project. The printing costs are scheduled for the action 8
to prepare the book (publication) in English for the international audience.


Organising workshops and seminars

The scheme for these actions are relatively similar – the partner organising the workshop or the
seminar has to organise the event and to provide the facilities for the conference (rooms and
translation only for the seminar in Estonia when the international experts are invited). For the
other partners there are the travel costs scheduled These costs include the normal average travel,
per diem and accommodation for two participants. As for the action 4, the travel costs for EKHHL
are planned as the accommodation costs for international (Nordic) experts invited to the seminar.
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The action 9 is slightly different from these described above. All the partners have to organise the
final reporting-seminars in their places for local audience in the national languages. Each of the
partners will prepare the national publications to be delivered. The project manager will
participate all these workshops and there are some travel funds planned to take all the
responsible representatives of the partners together (on any of the national workshops) to plan
the follow-up activities for the project.

As the action 9 will be targeted directly for the wider public (professionals, practitioners, housing
associations, local authorities, and residents), the partners have to find additionally local money
to fund these activities there.


Study tour

The scheduled study tour is aimed to give the representatives of the partner-organisations some
idea how housing maintenance is organised in the Nordic countries. The costs in the budget are
estimated to cover a short tour for two representatives by each of the partners. But in fact this
action is scheduled to be covered greatly from own sources of the partners. At the same time if
there will be more professionals from the partners willing to participate, hopefully there will be no
limits to the upper sum to be invested.




Roode Liias

Professor
Tallinn Technical University

22/08/2002

								
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