Construction market of Ukraine has been developing quite dynamically for the last few years. It can be observed in diversity of construction materials and services and in customer’s approach to the construction process. Some customers prefer to enter into all details and stages of the project and select subcontractors. Other customers are reluctant to penetrate into construction processes opting for comprehensive approach and one project responsibility center.

Responding to the market needs Engineering Construction Company KARKAS extended its range of services in 2007 to offer both supply and mounting of complete quickly-mounted buildings and comprehensive project support including designing and general contracting.

We are discussing grounds that made the company enter new fields and requirements set for the market players with Mr. Aleksander Gitalov, Director of KARKAS General Contractor Project Management Department, and Mrs. Alla Makhaniok, Director of KARKAS Design Department.

- Would you please tell us why KARKAS Company started dealing with general contracting?

Mr. Aleksander Gitalov: - Main activity of our company is supply and mounting of complete metalwork quickly-mounted buildings. Accumulating large experience in building erection we have faced the situation quite often when a customer wants to get not mere building and mounting but "one source" project on turnkey basis. Our priority is satisfied and loyal customer. Therefore, we can say that shift to the concept of general contracting and designing is a response to the customers’ wish of having us as integrated project managers.

Bu general contracting I mean strategy development, planning and implementation of all the construction stages starting from preliminary and ground works on the construction site up to engineering network accomplishment, landscaping and delivery of the project to the customer.

- Is it possible to win loyal customers through only extending service range?

Mr. Aleksander Gitalov: - Service range extending per se is not exclusive on the construction market. Much depends not only on quantity but rather on quality of the works and on the way the general contractor fulfils its obligations.

Noteworthy, that the customer is not construction expert in the majority of cases. At some point of his business development he just needs expanding and new building needs to be constructed. It is not easy for the customer to handle with materials and services and a variety of prices. It is one of our goals to make it crystal-clear for the customer what he pays for on each stage of the project and what benefits each technology has.

- Alla, what were the pre-requisites for your company to start providing general contracting services?

Mrs. Alla Makhaniok: - Designing is not new for the company. We have accomplished designing of different structures of our buildings and accumulated substantial experience in project realization. Today there are 53 buildings throughout Ukraine with total space of 340 thousand sq. m.

Following the abovementioned customers’ wishes and market tendencies our company decided to re-organize Engineering Department into Master Designing Department which will manage projects for the buildings mounted by KARKAS.

- Which difficulties are faced by the general contractor in realization of commercial real estate projects?

Mr. Aleksander Gitalov: - General contracting is interesting and complicated task. On the one hand, it provides free choice of necessary project tools. On the other hand, it imposes heavy burden of responsibility on the general contractor both for his own actions and for sub-contractors’ actions.

It is important for the customer to meet the contractual conditions related to deadlines and cost of the works. Construction project management is long-term process lasting from six months up to one year and more. Since the construction material prices are rising constantly (prices of basic construction materials have risen at more than 10% since the beginning of 2008) and some items are demanded constantly which sparks the shortfall, it apparently makes impact on the project realization and requires permanent control and adjustment of actions of all its stakeholders.

- How do you manage to tackle this issue and meet all the deadlines?

Mr. Aleksander Gitalov: - We develop clear system of resource conservation and expenditure records for each project. Partnership cooperation with suppliers is of great avail for us as well. We carry out the most vital works such as mounting of structural units and envelops by ourselves. When we have to engage subcontractor we choose only reliable trustworthy partners and exercise compulsory control of all the processes.

Integration of project development and general contracting in one company contributes to communications and understanding among the project developers and constructors which, ultimately, leads to quality improvement and reduction of construction time-limits. Having effective organizational work we can guarantee confidently to the customer that all the project performance results are achieved.

- Does current Ukrainian market set any particular requirements to project developing?

Mrs. Alla Makhaniok: - As commercial real estate market grows, requirements to projects become more stringent, new assessment criteria arise, ever more customers want to see individual approach to project development with consideration of all peculiarities and details of particular business technology. It is no wonder since efficiency of building operation and future business success of the customer depend on conformity of the building with requirements. Therefore, we switch from modularity to customized structures with account of particular technological requirements.

Second point is time-limit of project documents elaboration. It makes significant impact on time of putting the building into operation being related to project investment payback period. To optimize project development time we focus much on organization of adequate communications within the project team and work coordination.

Finally, it is compliance of project solutions with the regulatory framework of Ukraine.

- What are you dealing with today and what is your vision of departments in the future?

Mrs. Alla Makhaniok: - This year we plan to develop master project for two or three buildings supplied by our company. Along with it, we cooperate with other project institutions when realizing the projects. Currently, majority of these projects are meant for trade. However, warehouse projects are also underway. We plan to focus more on warehouse and trade center projects.

KARKAS Company plans to supply 16 buildings in 2008 with total space of 135 thousand sq. m. Plans for 2009-2011 presuppose 54 buildings with total space of 620 thousand sq. m..

Mr. Aleksander Gitalov: - Three-four buildings out of 16 supplied this year will include general contracting.

The company will continue extending service integrity and quality improvement to provide the best possible services to its customers