Author Archives: Katie Mallinson

Do modern economics mean the sale of redundant plant is impossible?

In the latest of his regular columns for Demolition and Recycling International, RVA’s Managing Director Richard Vann gave his thoughts on whether modern economics make selling redundant plants impossible.

If you haven’t read the full article, you can catch up here….

Impossible is a strong word. By definition, it means something that is completely out of the question – it cannot be done.

But of course, this statement is not true when it comes to the sale of redundant plant. There are occasions when assets that have reached the end of their useful life for one operator, can still contain inherent value in the eyes of another. A sale therefore can go ahead.

Consideration of this route is understandable. The goal – for any soon-to-be-decommissioned facility – should always be to maximise the return on assets where possible and safe to do so. However, factors such as plant age, former processes, recovery cost, testing, market forces and commercial competition, will all form part of the decision as to what should happen next.

As my dismantling for re-erection column stressed in the last issue of D&RI, the sale of redundant plant should be realistically viewed and often not prioritised as the ‘plan A’ for an unwanted facility, as the challenges likely to obstruct a sale are significant in both scale and quantity.

Supply and demand

Firstly, there are the basic economics of supply and demand at play.

In developed parts of the world – across virtually every heavy industry – operators are seeking ever more efficient processing technologies. Sometimes this is to stay on the right side of the law, if the ageing plant risks breaching necessary legislative or EHS standards. But there are capacity, ecological, financial and innovation advantages associated with investing in smarter and more modern equipment too, which, collectively, can prove the catalyst for operators looking to proceed with an ‘out with the old’ strategy.

This widespread availability of redundant assets means that from a resale perspective, the market is becoming saturated with standard and off-the-shelf kit, and such plants – or component parts of them – are consequently becoming harder to sell.

Copycat technologies

Processing markets are becoming further saturated because – as markets are maturing and operators’ expectations are becoming increasingly sophisticated – all eyes are on the latest plant and equipment. But many countries are so proficient at designing and manufacturing ‘copycat’ technologies – often for very affordable investment levels – that any ageing assets would need to be extremely advanced to justify purchasing something ‘second hand’ as opposed to brand new.

Could you sell a ten-year-old laptop on eBay, for example, when so many better, more current models exist – often without breaking the bank? It would probably be a struggle – especially if the laptop is shipped in hundreds and thousands of component parts that require re-assembly before it can be used.

Finding a ‘buyer’

The sale of a redundant asset is – perhaps unsurprisingly – far easier if the facility is to be transferred to an operator within the same group as the seller.

When RVA was engaged to oversee the decontamination, demolition and dismantling of a manufacturing facility on an 11-hectare site on Jurong Island, Singapore, for example, selected plant items were carefully recovered so that they could be transferred to the owner’s sister plants worldwide.

This project was bound by tight timescales, given a commercial driver for the client to exit the site within defined lease and permit parameters. The work was therefore planned sequentially with designated demolition areas handed over in a carefully phased manner. Potential sources of ignition were subject to strict controls, due to the nature of the chemicals housed nearby and the presence of some units which had to remain operational during the initial stages of the programme.

Had this shipment of assets been dependent on the involvement of a third-party buyer, the project specifics may have been quite different, due to the complexities involved. In-house transfers are often easier than external ones, as the ‘owner’ has control at both ends.

Sometimes, sadly, deals also fall through. And the longer a plant lays idle – whether comprehensively mothballed or not – the greater the chance, on the whole, that an eventual sale will prove difficult. The condition of the asset is likely to deteriorate, and with the passage of time there is usually an increased risk that EHS and legislative compliance will no longer be guaranteed. In addition the cost of keeping an asset in saleable condition increases exponentially with time and can erode any potential commercial gain.

What is financially viable?

Acknowledging that the operator will undoubtedly wish to proceed with the most financially advantageous – and hopefully safe – route map for their decommissioning project, a feasibility and options study will prove an extremely valuable modelling exercise before any works begin.

It is crucial to explore all possible project scenarios because, sometimes, the route eventually selected may not have initially been considered or deemed possible, due to false perceptions of the associated financial burden.

The complete clearance of a plant is often the most straightforward and cost-advantageous exercise overall, for example. This is because, from a technical perspective, a full clearance usually only requires a global or battery limits isolation strategy. In simple terms, the plant is usually rendered ‘cold and dark’ so that, once residual hazards have been removed, all structures can then be demolished for scrap and the site taken back to flat slab. This then paves the way for the construction of a new facility, or the sale of the site ‘as is’. In many instances the net cost/gain of such a project could be far more attractive than that to facilitate the sale of a redundant plant.

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Offshore decommissioning – where do the biggest challenges and opportunities lie?

In case you missed the latest edition of Offshore magazine, our MD Richard Vann penned his thoughts on the challenges and opportunities within offshore decommissioning.

Read the article in full here….

The number of offshore assets reaching their end of life, globally, is rising, meaning decommissioning projects are a real eventuality for many operators. Drawing upon over 35 years of working throughout the decommissioning discipline, Richard Vann advises the key considerations plant owners should therefore make as they look to the future…

Decommissioning is an inherently hazardous exercise, which requires meticulous planning, experienced management and an extremely defined skill-set, if it is to be executed safely. If that exercise is being carried out in a remote offshore location, exposed to the elements, with added access difficulties and limited options, it’s no surprise that the challenges are magnified further.

That isn’t to say the challenges cannot be overcome of course. As is the case with any complex undertaking, they simply need to be anticipated, acknowledged and addressed, if the project is to unfold with maximum respect for safety standards, the environment and operators’ budgets.

Here are 8 key considerations to make when embarking upon an often-necessary decommissioning route map:

  1. Establishing a decommissioning mindset

In some countries, decommissioning is still viewed as a ‘necessary evil’ – it doesn’t help to produce a revenue-generating asset, as a commissioning exercise would, so organisations often fail to dedicate the level of time, skills and resources truly required. But there cannot be any temptation to cut corners, as this could put lives, the environment and the commercial integrity of the project, at risk.

  1. Assembling a competent project team

For one of the first times in the history of the decommissioning profession, there is a risk of demand outstripping supply – an issue now being felt on a global scale. The question of who is available to undertake the work is therefore one of the largest challenges currently faced by the industry – especially when it comes to tackling offshore assets.

Great care and attention should therefore be taken to assemble a competent supply chain including decommissioning expert and contractor (people who understand the world of decommissioning inside out), as well as offshore oil and gas specialists – nobody knows these assets more than the operators who have worked on them their whole lives.

  1. The logistics of the project

Comprehensive planning lies at the heart of every successful decommissioning project, but the challenges are undeniably greater – especially from a logistics perspective – when working offshore. As is widely known, getting people to and from a platform in itself is a hazardous process. Therefore, where possible, personnel movements should be planned so that return trips  are minimised.

Add to this the physical constraints of getting large plant to an offshore location, and the job is harder still. There will inevitably be limitations regarding the equipment that can be used, so specialist knowledge is required to understand exactly what is possible, how this will affect the programme of works (including timescales) and how to move forward with safety at the forefront of all decision-making.

  1. Bringing assets to a ‘known state’

If the asset has already been mothballed, this poses many potential difficulties – some structures will have only been partially cleaned, for instance.. Offshore structures will also degrade much faster than a similar asset on an inland location, due to their exposure to the elements. This adds to the difficulties associated with establishing their ‘known state’ and understanding the potential pitfalls that lie ahead.

When first arriving on site, it is therefore imperative to assess the level of residual product, any loss of containment and the structural integrity of the remaining assets.

  1. Respect the role of technology

Drones can often provide a helpful inspection aide both on- and offshore. They can be flown over an installation – and in some cases deep into specific structures – before people need enter any vessels or work at height themselves. The convenience and safety benefits associated with this clever use of technology should not be underestimated.

As always, the pilot will assess the weather conditions prior to sending a drone in, and admittedly the window for a safe flight may be far more limited when working offshore. But it is far better to lose a drone than for a person to suffer even a minor injury on-site.

  1. Varying regulatory frameworks

Demolition professionals undertaking assignments on an international scale will inevitably be presented with varying legislative standards. It could be argued that this makes it difficult to ensure compliance when faced with differing levels of regulatory stringency, but the stance on this should actually be obvious.

There should never be a safety scale, e.g. where the degree can be ranked as ‘very unsafe’, ‘unsafe’, ‘almost safe’, ‘quite safe’ and so on – safety is an absolute and non-negotiable standard. So, whilst criteria and attitudes may fluctuate from country to country, the baseline reference point should be best practice. Generally, this is driven by the legislation and codes adopted by EU nations.

  1. Waste management and disposal

Decommissioning experts are now adept at delivering projects with ~100% material reuse and recycling rates, to the point where such high environmental standards are now becoming the norm. Consideration should therefore be given to the waste management programme for offshore works, especially because there is the added – yet manageable – challenge of transporting materials (including hazardous substances) back onshore.

  1. Cost

The number of asset owners that favour a solely cost-led rather than quality/cost-led approach to decommissioning, is thankfully dwindling – supply chain selection criteria is now far more multifaceted than simply bottom-line impact. This isn’t to say that financial parameters won’t be encountered, but if they risk compromising EHS standards, works must stop immediately.

Richard Vann is managing director of RVA Group – a specialist project management and EHS organisation that has completed more than 770 complex decommissioning, decontamination, dismantling and demolition projects worldwide. With over 35 years’ experience in the sector, he is past president of the Institute of Demolition Engineers and the Institute of Explosives Engineers. A notable commentator in this field he was also the keynote speaker at the World Demolition Summit 2017 and session chair in 2018.

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My Working Day- Richard Vann

In case you missed the article, our MD Richard Vann, recently spoke with Business Leader about what the day to day running of a decommissioning consultancy looks like. Read the full article here…..

As the leader of a company, you are there to set an example, to lead and inspire a team individuals to achieve a series of business goals. But how do these business leaders go about their daily routine?

Business Leader spoke to Richard Vann – CEO of RVA Group about his working day.

  1. What time do you usually wake up?

I’m an early riser, so will usually be out walking the dogs – Ben and Jerry – by 06:00.

  1. What do you typically have for breakfast?

I know many will frown upon my breakfast choice, but I rarely eat in the mornings – hot water with ginger and lemon is my go-to start to the day.

  1. What is the rest of your morning routine before you start work?

It depends what my working week looks like, but if I’m in the UK, I’ll usually be in the office for 07:30-08:00. So, I listen to the news with my wife and son before I drop him at school.

  1. What is the first thing you do at the start of your working day?

We have long had an international presence – and are increasingly working further afield including the Middle East – so I always prioritise responding to any emails that have inevitably come in overnight. I am a big fan of virtual meetings too, especially with clients and colleagues based outside of this country, as I think face-to-face contact is important regardless of location.

Then I’ll focus on the strategic priorities I’ve already set for myself the previous day, which could include supporting particularly complex bids for upcoming projects, liaising with our teams as they progress large-scale decommissioning works in virtually every corner of the globe, or working on some of the seminars that we routinely deliver at industry forums internationally. We’ve got presentations coming up in Amsterdam, Prague and Moscow, for example – all in Q1 of 2020.

  1. How do you prioritise your day’s work?

I’ve always been really disciplined with what needs to be both dealt with and delegated. This has helped me prioritise as the company has grown, it’s a skill I’ve relied on more and more – and I encourage it in others.

I am protective of my time and try to always think clearly about what are the must-do tasks, what are nice-to-haves, and what is – in truth – unnecessary.

  1. Do you plan meetings or are they a waste of time?

I have never been a fan of meetings for meetings’ sake, and I’ll politely cancel – or at least reschedule – an appointment if there’s nothing to discuss. That said, sometimes the purpose of a meeting is to develop relationships or foster trust, so sometimes things beyond an obvious agenda need to be considered too.

I think anyone who does commit time to a meeting should plan what needs to be covered – including the ‘softer’ stuff. But I don’t think you always need to be in the same physical room for a meeting to be effective. We’ve begun to increasingly rely on technology over the years, opting to use tools like Teams where we can, for example. This cuts down on travel, alleviates diary pressures and means long-distance relationships are prioritised with the same magnitude as closer ones! Having said that there are occasions where sitting around a table to debate issues and observe the body language of all participants is essential.

  1. Do you have a working lunch or is it good to take a break?

A similar response to my breakfast – I have a very light lunch, usually of fruit and nuts, so I don’t really need to take a break

  1. When does your working day finish?

I do try to prioritise a work-life balance – especially after 45 years of working – but the day finishes when it finishes. I could have a really late finish, particularly if I’ve been travelling. However, I’m a big believer that it’s not the time you put in, it’s what you do with the hours you’ve got, that counts.

  1. How do you prepare for the next day’s work?

I’m a huge paper-phobe – the only thing I carry is a small A5 book, and it’s now a luxury that I can’t be without. I use this to list my ‘must dos’, which means I’m better equipped for the day ahead.

  1. Favourite piece of technology?

It’s an obvious thing to say, but my smartphone as it’s my ultimate connectivity to all the personal and professional things that matter to me. Thanks to our secure cloud I can work from anywhere in the world, which is important both as a leader of an international business and someone who likes travelling too!

  1. How do you switch off?

I try to get to the gym at least three times a week, at weekends or before or after work, and have taken up the guitar again – I find beingin the studio really therapeutic and ‘me’ time. I also have a particular interest in the period between the rise of Communism and the end of WWII, as my library at home and my wife’s frustrations with my ‘obsession’ testify.

  1. Best piece of advice you’ve received?

Three golden nuggets in my book:

1.Be confident in deciding which projects to take and which to walk away from.

2.Do what you do best and leave everything else to others.

3.Never chase quick money and always focus on longer term success.

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3 takeaways from the Russian Demolition Forum

RVA Group’s managing director Richard Vann recently took to the stage at the inaugural Russian Demolition Forum in Moscow, as industry professionals from around the world gathered to share ideas, expertise and visions for the future of the sector.

Following an in-depth two-day agenda, here are Richard’s 3 key takeaways from the event:

  1. Firstly, this was an ambitious event programme to deliver, given the number of guests who were invited to attend from a wide range of truly global locations. But the bold plan did pay off. This wasn’t just a testament to the event organisers – it also reminded everyone involved just how many talented, experienced and forward-thinking people there are in what remains a very niche area of engineering.

I have played a part in delivering almost 800 RVA projects around the world and believe our network is very strong, but I still made some very interesting and valuable contacts when I was in Moscow.

  1. The importance of cross-cultural knowledge transfer cannot be underestimated. Approaches naturally differ from one country to the next, as do attitudes to environmental protection, health and safety standards, best practice on-site techniques, and more. But the triangulation of expertise – via events such as this – plays a crucial part in raising standards on a truly global level.

Over the years we’ve seen so many examples of locally ‘acceptable’ standards, often driven by the legislative benchmark in the country concerned. But in parts of the world where the demolition profession has advanced significantly – such as Western Europe – minimum standards stretch far beyond legislative compliance alone.

The more we – as an industry – can share project scenarios, learnings and ideas, the greater our EHS awareness as a collective.

  1. It was great to see the appetite to form a new demolition federation in Russia, off the back of this first successful forum. If such a strong will can be stimulated following a single event, it will be very exciting to see how this association takes shape with continued dialogue, meetings and future events.

It is a privilege to have been involved from the outset and we look forward to seeing what happens next…

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RVA begins dismantling contractor search for Cypriot power station

Following 12 weeks of collaborating with decommissioning consultancy RVA Group, the Electricity Authority of Cyprus (EAC) has embarked upon the international tender and selection process for a contractor to execute a Cypriot power station dismantling project.

It was announced late last autumn that RVA had been appointed to oversee the complex 26-month assignment at Moni Power Station – a 1960s construction approximately 14km east of Limassol – and the development of a detailed tender package was one of the first crucial elements of the initial planning and preparation phase.

A number of local partners – specialising in safety management, structural engineering and geotechnical science – are already working with RVA’s team of engineers. Now all eyes are on the identification of a dismantling contractor who can help fulfil the complex brief.

The project will see the sequential clearance of a number of assets on the 16 hectare site, including six 30MW steam and oil-fired turbines, boiler generating units and ancillary equipment; six chimneys; the fuel oil pump house; and switchyard. All have been out of operational use since 2013.

Commenting on the project, RVA’s managing director Richard Vann said: “The careful formation of a best-fit team acts as a crucial foundation for any dismantling or demolition assignment.

“On paper, the appointment of professionals from varied cultures and backgrounds sounds like it has the potential to present additional challenges, when it comes to things such as regulatory knowledge and language barriers. However, engineering-specific experience and a shared, non-negotiable commitment to the safe, environmentally sound and cost-effective execution of works, are actually the most important criteria when selecting who to bring on board.

“We have now worked on almost 800 projects across the globe and our international experience – including the management of diverse teams working on energy sector schemes – is one of the reasons why we were appointed to oversee this two-year brief.”

RVA will have a permanent on-site project management presence until the programme is complete. RVA’s key role during this time is to provide a range of engineering, site project management, technical compliance and financial reporting services – to name just a few. An RVA asbestos analyst will also travel out to the Mediterranean island to survey and monitor the hazardous insulation material removal processes, as the dismantling unfolds.

 

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Managing cultural differences on global demolition sites

As part of his regular column with Demolition and Recycling International, RVA’s MD Richard Vann penned his thoughts on managing cultural differences on global demolition sites.

If you missed the article, you can read it in full here…

No two projects are ever totally the same. But the variances – and for some people the challenges – increase further still, when works take place in distinctly different locations, with teams made up of personnel from a number of cultural backgrounds.

There are language barriers to navigate, for example, and perhaps unanticipated norms surrounding working hours, break times or the pace of progress. Even the climate can influence on-site behaviour.

Legislation also varies significantly, which can set the tone regarding project expectations, unless carefully managed from the outset. But there should be one common law irrespective of culture, geography or the scope of works – respect. Respect for the client, colleagues, the environment, wider stakeholders and of course the engineering discipline itself, can help set the project barometer.

Establishing this respect takes effort of course, but this is usually easier to attain with strong levels of communication, consultation and clarity. The corporate minimum standards for the project – however large or small – should be outlined and agreed from day one. Globally-respected British standards are often the starting point, but where higher levels of quality are known, they should always provide the benchmark.

I have previously stopped work on site because agreed safety protocol is not being followed. It represents a huge mindset shift for personnel to wear harnesses in some parts of the world, for instance. But when they did start to wear them and that hurdle was overcome, the next obstacle to tackle was appreciation for the fact that they needed to be clipped on to a fixed stable point, to be of any value!

I’ve also been to sites that didn’t have a rescue plan in place if someone was to fall and become suspended – basic for those in the know but new thinking for many. Approaches to risk management differ from country to country but risks don’t become any less onerous simply because you’re working in different territories.  A fall from height in the UK and a fall from height in India – the result is inevitably the same.

Some culturally-driven safety challenges are seemingly less extreme – refusing to wear sunscreen in blistering temperatures, working without a shirt on or turning up to a heavy industrial demolition site in trainers. It may be the norm for some, but if this practice puts safety levels in jeopardy, we cannot forget what we’ve been taught and know is right, and leave our morals waiting at home for us.

It’s about being respectful, of course, but also robust.

When a demolition assignment is taking place in a developing part of the world, it does not mean that incidents can be allowed to happen. This is why internationally experienced demolition teams are now finding their expertise being exported worldwide, so that they can help protect the integrity of jobs and the levels of EHS excellence witnessed on site – particularly as projects grow in scale and complexity.

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