Tour de Force
MAF Dalkia is leveraging its energy management expertise in its FM services offering, says CEO Dr. Hayan Sayed in an interview with FM Magazine.
There are many roads to facilities management. French giant Dalkia International took the energy management and maintenance route. Dr. Hayan Sayed, CEO of MAF Dalkia discusses how the company is positioning itself in the GCC market.
“It’s one old lady,” jokes Dr. Hayan Sayed, chief executive officer of MAF Dalkia, in reference to Dalkia’s 150-year history.
The founding company of French multinational, Compagnie Générale des Eaux, was created as a result of a decree issued by none other than the Emperor Napoleon III himself in 1853. Fast-forward to 2002 and MAF Dalkia Middle East is born as a joint venture between Dalkia International and Majid Al Futtaim Group.
“MAF is one of the region’s leaders in property development: shopping malls, hypermarkets, leisure activities, hotels, resorts and professional services,” explains Dr Sayed. “We saw that the time was right several years ago to come into the UAE market, but we wanted to ensure that we found the right partner. Majid Al Futtaim Group has proved to be exceptional in this respect.”
Dalkia is co-owned by two massive companies with a collective turnover of €78.5 billion: Veolia Environnement (previously named Vivendi Environment) with 66 per cent, and Electricité de France (EDF) with 34 per cent.
With 43,300 staff managing 80,000 facilities in 38 countries, and a turnover of €5.65 billion in 2004, Dalkia has brought its global might to the Middle East with the aim of managing facilities for a diverse range of projects including hotels, shopping malls, hospitals, residential buildings and industrial facilities.
Dr. Sayed then elaborates further on MAF Dalkia’s raison d’etre.
What would you say are the main activities of Dalkia?
The main activities are structured around facilities management; energy management, with a combination of both; energy networks, including district cooling or district heating, cogeneration and trigeneration plants; and industrial activities.
Dalkia's promotional material describes facilities management as “overall management of enterprise support services”.
In the GCC, there tend to be differing opinions on what facilities management actually is. How do you define it?
It is clear that facilities management is a new notion here, which means the market is not completely mature. Clients are discovering this notion. Behind facilities management I think there is the important concept of outsourcing for clients. The client needs to define first what is his core business. The interests of facilities management come after this definition, which is to outsource the different services necessary to the business but not corresponding to the core business of the client.
We define two parts to our facilities management. One is what we term the multi-technical services. This includes all the maintenance operations of the technical installations – like the chillers, the AC, the electro-mechanical aspects, plumbing, building repairs, elevators, escalators and so on. And then we have also the general services: the other services necessary for the good functioning of the activity of the building, such as cleaning, waste management, pest control, landscaping and so on.
We believe there is synergy between consultants and operators. The consultant can consult but cannot guarantee. The operator can guarantee. There is no conflict of interest.
With a number of dedicated facilities management consultancies setting up in the region, is it relevant whether providers self-perform blue-collar work or outsources it?
When we analyse the different companies in the market, there are different methodologies of managing facilities. We believe there is synergy between consultants and operators. The consultant can consult but cannot guarantee. The operator can guarantee. There is no conflict of interest.
What’s interesting is to look to the origin of the companies. There are [FM] companies that have come from property management, and they will focus on the management of other companies who will do the different services, and then adding on their fees for this management.
There are other companies that are coming from a MEP/installation background, which obviously have expertise in MEP and installation.
There are others coming from construction. Dalkia is coming from the maintenance business and from the energy management business. This is why, for technical work, we do it in-house. This is for two reasons: one, to have the best control over the quality of the operation. And secondly, to ensure energy savings, to give value to the client.
How do you differentiate what you offer in terms of energy management from half a dozen other FM companies that claim to offer identical services?
By our results - which speak for themselves! First, we are an operator. We do not announce theoretical savings but commit contractually to making savings. If we don’t deliver on our savings commitment we pay the difference.
At the same time quality is ensured through KPIs [key performance indicators], which are also contractual. And the KPIs are connected to penalties, which means if we don’t deliver the KPIs, we are going to pay penalties. So there is a double control.
What are the key areas in which you are saving energy?
If you look at the UAE and the building costs here, you have two big components of the operating cost of the building: one is the facilities management, the other is the energy management. If you look at the energy bills, you will find – depending on the design of the building and the design of the AC installation, and depending on the operations of the building – that around 60 to 70 per cent is related to air conditioning.
So the main point is what optimisation you can do for the AC. What’s important is that as we are an operator, the engagement we are taking is not theoretical. Behind an engagement of the energy bill, we have to set up an energy management programme, and then have a close control on all the technical installations to be sure that the result conforms to the plan. After AC, other consumptions are lighting and electro-mechanical machinery.
What services is Dalkia providing in Deira City Centre?
We are managing all the facilities of the complex in Deira City Centre. This includes the mall, the two office buildings – MAF Tower and City Centre Offices – the Sofitel Hotel and Residence. We are managing all the facilities, from the technical part to the general services.
The main benefits to the client so far have been the improved quality of operations and the energy savings, which have been more than 25 per cent a year. And this is directly on the electricity bill of DEWA, which means it’s a really positive cash flow. It’s a net margin. Imagine how many sales the client would have to generate to make the same margin on the bottom line. It’s huge!
Given the mixed-use nature of the Deira City Centre complex – mall, hotel, offices, residential – what would you say the challenges of managing it are?
On each site we have a manager who has to take into consideration the operations of the client. There cannot be one model for all. For example, the working hours of a hotel are completely different from a shopping mall, which are different from an office building, which are different from a residential building.
There are two important tools that our managers are using. One is preventive maintenance: all the preventive maintenance is managed with IT tools. What’s important is what data you put into the preventive maintenance programme. The basic information is what assets you have and how you want to manage them. After that is what tasks you need for the management and what schedule you will have.
The tasks and schedule are derived from different expertises. One of them is what the contractor is saying. The contractor will recommend you a certain number of operations, which you take into consideration. But you also take into consideration the life of the building, the operations of the building and also the general conditions - such as the climate.
The second important point is our call centre. It is 24 hours, 365 days. All the calls, all the requests, all the claims are managed on an IT tool linked to our preventive maintenance. In the call system we have two tools. One is a classical call centre tool related to the PABX function – which manages the quality of the calls, the waiting time of the clients and the number of calls. So it enables us to manage the load coming into the call centre.
The other is to manage the traceability of the request of the clients. By this, the call arrives at the call centre, it enters directly in the IT tool and after that there is a process. All the process is traced within the system. The call will arrive in the call centre and the tool will say to which technician it should be diverted. It goes to the technician who operates, resolves and then calls back the call centre and gives a report. So the manager has real-time supervision of all that’s happening in his installation. He’s monitoring the reports. All his decisions are then going back to the technicians through the call centre system as work orders to act and resolve.
Dalkia talks about a 'global lifecycle costing' concept. Can you expand?
Absolutely. When you look at the operating cost of the building, you find three important dimensions: one is the facilities management; one is the energy management; and the other one is the lifecycle of the installation and the machines. This third aspect is related to the running hours of the installations.
The programme of operations for the machines is very important. First, it will impact the energy consumption, and second it will impact the life duration of the machines. That means, as an operator – and this is one of our main added values – we work on the three dimensions at the same time: the maintenance, and then which programme we will set up to optimise both energy consumption and the running hours of the installations.
Now if, for example, on some installations you have different types of machines to produce the AC, some of them will be more efficient than others in terms of energy consumption. If you run these ones in priority, you will save money in energy costs, but at the same time, the life of these machines will be shorter than the others. And then while you reduce the life of these machines, you increase the life of the others. So there is a real balance, it takes real know-how to study the three dimensions at the same time to determine the right kind of programme.
In Deira City Centre, we save more than 25 per cent on the energy bill, but at the same time we save more than 25 per cent of the running hours of the machines per year. That means for every four years of the life of the machines, you get one extra.
Even though the market is not mature at the moment and the concept of FM is new, we believe the potential is huge. We have felt a revolution in the market over the past two years- demand has increased.
What kind of projects are you looking to provide services for here?
We aim to develop activities such as district cooling, FM and energy management wherever we have prospects in the Middle East. We are ready to provide with proposals and with services. All segments of the market are potential for us, such as shopping malls, residential buildings, airports, ports, hospitals and so on.
Even though the market is not mature at the moment and the concept of FM is new, we believe the potential is huge. We have felt a revolution in the market over the past two years. Demand has increased. With the speed of projects coming up in the GCC, this concept is necessary. We are in a country where a lot of new technology is being used and specialists are required to manage, maintain and operate the facilities.
We feel that clients are ready to listen and take the strategic decision to outsource non-core strategic activities to a specialist. Because there is real added value to them in saving money and getting a better service.