Munich manoeuvres

With the World Cup fast approaching it was unthinkable that the upgrade of the Holiday Inn in Munich would not be completed in good time. So it was a bold move when the job's project manager John Rowan & Partners decided to push the scheme back by two months. The risk paid off. The hotel is now up and running and was completed on budget. But there were a few hairy moments along the way.

The original programme for the refurbishment by client Intercontinental envisaged work starting on site in September 2004 and finishing in April 2006. However, when JRP was brought on board it decided that to get the job done more detailed investigation of the building was required. The tender period would also need to be extended to allow contractors more time to familiarise themselves with the job.

The challenge

The hotel is a complex building. Built in 1973, it comprises 580 rooms and is embedded in a mixed use complex including a shopping centre, basement car park and petrol station. It was in need of a major overhaul as it had seen minimal investment during its 30-year life and now the local authority had ordered it to improve fire and life safety standards.

JRP advised the client to go for a two stage tender process, to allow a shortlist of contractors to hone the programme, logistics and construction details with the project team. Andrew Nycyk, partner and professional value manager at JRP, was seconded as a project manager to Intercontinental for the duration of the project. He admits that the two stage tender process added two months to the procurement period but argues that it was time well spent because it resulted in a contract sum with a high degree of certainty.

"The original plan for the hotel had a price tag of £31.5m to £35m," Nycyk says. "The cost didn't stack up for the client so we suggested a £24.5m model, which worked. We were involved at a very strategic level, including making the case for this model to the Intercontinental board."

The procurement

The final choice of contractor presented another challenge. The German building industry was in decline at the time, leading to a flurry of competitive bids. But JRP believed some were below the actual cost of the work. As a result the lowest two contractor bids were rejected.

Among the contractors JRP was prepared to shortlist, it believed none had both the degree of construction knowledge and the level of mechanical and electrical engineering skills required for the project. JRP tackled the problem by asking its preferred main contractor, a local player called Strabag, to team up with M&E specialist Imtech. The two formed a one-off company to undertake the contract known as Arge.

The kick-off

Work began in December 2004 but JRP still faced issues. Nycyk says that within the overall mixed-use complex "no one had any knowledge of who owned what service routes". Less was known about the state of the routes and how to access them. Substantial intrusive investigation was required, causing a fair amount of disruption to the other tenants in the complex. As a result the project team had to tread carefully to maintain good relations with the tenants. "With some we had to buy their leases off them for three months just to get to their pipes," explains Nycyk.

Then there was the local authority to contend with. Once they realised a major project was taking place they laid down more stringent standards for the scheme to comply with, says Nycyk. "A great deal of effort was taken in negotiating realistic standards," he reveals. The situation was compounded by Munich having a separate building code from the rest of Germany, which forced JRP to seek specialist local planning advice.

A further challenge was to keep the hotel open while replacing 90% of its M&E systems and 100% of bedrooms and back of house facilities. Since the hotel consisted of four main blocks, JRP decided to undertake the job block by block. The company started the project on the smallest block of 120 rooms, which was to act as a "development and learning curve" for the contractor and supplier.

What a result

The strategy must have worked because the project was completed at the end of January 2006, on budget and two months ahead of schedule. The cost works out at £41,500 per room, which JRP reckons is 25% lower than what would be expected for a similar project in the UK. Now all that remains for the Holiday Inn is, like the rest of us, to eagerly await the World Cup.