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The whole-process engineering consulting is an internationally accepted form of engineering construction organization. Different from the general process consulting service, the whole-process engineering consulting service is a process service involving many departments such as enterprises, technology, operation, and science and technology, covering the entire life cycle of the engineering project. Since the reform and opening up, the marketization of engineering consulting services in China has developed rapidly, forming specialized consulting service formats such as investment consulting, bidding agency, surveying, design, supervision, cost estimation, and project management. The fragmented management brought about by these individual service supply models has posed a significant obstacle to enhancing the scientific level of fixed asset investment decision-making. As the construction level of fixed asset investment projects in our country gradually improves, in order to better realize the investment and construction intentions, investors or construction units have an increasing demand for comprehensive, cross-stage and integrated consulting services in the decision-making, engineering construction and project operation processes of fixed asset investment projects. The contradiction between this demand and the single-service supply model caused by the current system is becoming increasingly prominent. To address the demand contradictions in the engineering consulting market, it is imperative to promote the whole-process engineering consulting. This article introduces the development of the whole-process engineering consulting both at home and abroad. Against the backdrop of urban renewal and development, taking the comprehensive renovation model of old residential areas of central enterprises in Beijing as an example, it analyzes the characteristics and difficulties of this model and shares relevant distinctive practices based on it, with the aim of providing references for enterprises in the industry to carry out the whole-process engineering consulting business.
An overview of the development of the whole process engineering consulting at home and abroad
1. The development of international whole-process engineering consulting
Internationally, the development of the whole-process engineering consulting has gone through three stages: the first is the individual consulting stage. In the 1890s, American architect Mason established the Society of Civil Engineers, which independently undertook technical business consultation. The second stage is the partnership consultation phase. In 1913, the International Federation of Consulting Engineers was established, and the consulting industry began to expand from civil engineering to multiple fields such as industry, agriculture, and transportation. Partnership consulting companies emerged. The third stage is the comprehensive consultation phase. In the 1950s, with economic globalization, consulting services evolved from specialized consulting to comprehensive consulting, from technical consulting to strategic consulting, and from domestic consulting to international consulting. With the continuous development of the whole-process engineering consulting industry, some large-scale group enterprises have emerged internationally. They are the American AECom Design Group established in 1990, the American Fleux Company founded in 1912, and the American UUS Company founded in 1904. Their common feature is that they integrate investment, financing, design, economy, project management and trial operation in multiple industries.
2. The development of domestic full-process engineering consulting
Development history
The development process of the domestic full-process engineering consulting industry can also be summarized into three stages: The first was the start-up period from 1983 to 2004, during which the demand for engineering consulting began to sprout and the number of engaged institutions was relatively small; Second, during the growth period from 2005 to 2014, The State Council issued the "Decision on Reforming the Investment System", simplifying the investment process and creating opportunities for the industry. Thirdly, from 2015 to the present, during the mature stage, the industry growth rate has slowed down, the industry profit margin has declined, and the phenomenon of consolidation within the industry has increased. Various business models such as "cost +", "design +", and "supervision +" have emerged, and the domestic consulting industry has shown a trend of platformization and groupization.
Policy Interpretation
In 2017, The General Office of the State Council issued the "Opinions on Promoting the Sustainable and Healthy Development of the Construction Industry" (Guo Ban Fa [2017] No. 19), officially introducing the concept of full-process engineering consultation and explicitly stating that it is necessary to cultivate full-process engineering consultation. Encourage investment consulting, surveying, design, supervision, bidding agency, cost estimation and other enterprises to develop the whole-process engineering consulting through joint operation, mergers and acquisitions, reorganization and other means, cultivate a number of whole-process engineering consulting enterprises with international standards, standardize the standard templates for whole-process engineering consulting, and formulate service technical standards and contract templates.
In the same year, the Ministry of Housing and Urban-Rural Development issued the "Notice on Carrying Out Pilot Work of the Whole Process Engineering Consultation" (Jian Shi [2017] No. 101), selecting 8 provinces (municipalities) and 40 enterprises to carry out pilot work of the whole process engineering consultation, and put forward the requirements for the pilot work: formulate a pilot work plan; Innovative management mechanism; Achieve key breakthroughs; Ensure the implementation of the project; Implement classified promotion; Enhance enterprise capabilities; Summarize and promote experience.
In 2019, the National Development and Reform Commission and the Ministry of Housing and Urban-Rural Development jointly issued the "Guiding Opinions on Promoting the Development of Full-Process Engineering Consulting Services" (NDRC Investment Regulation [2019] No. 515), clearly defining two key points: comprehensive investment decision-making consultation and full-process engineering construction consultation. The contents of the two consulting methods and the way to calculate the remuneration for the whole-process engineering consulting services have been clarified.
Related concepts
The whole-process engineering consulting is an intellectual service activity that provides partial or overall solutions covering various aspects such as organization, management, economy and technology for the entire life cycle of construction project investment decision-making, engineering construction and operation. The scope of services may include comprehensive investment decision-making consultation, full-process consultation for engineering construction, and consultation during the operation stage (" Management Standard for Full-process Engineering Consulting Services "T-CCIAT0024-2020).
In 2022, the Ministry of Housing and Urban-Rural Development issued the "14th Five-Year Plan for the Development of the Engineering Survey and Design Industry" (Jianzhi [2022] No. 38), encouraging the design-led full-process engineering consulting model, supporting survey and design enterprises to extend to the front and back of the industrial chain, and developing full-process engineering consulting service models covering investment decision-making, engineering construction, operation and other links. Encourage government investment projects and state-owned enterprise investment projects to take the lead in implementing the whole-process engineering consultation. Design-led full-process engineering consulting has inherent advantages. Design runs through the entire project process, accurately grasping the owner's demands, and can leverage the leading technical advantages to coordinate the full-process engineering consulting with professional technology.
Market situation
Qualification requirements. The state has lowered the industry entry threshold for the full-process engineering consulting business. Currently, as long as one has design or supervision qualifications, they can carry out the full-process engineering consulting business. As of 2018, the cumulative total number of enterprises with engineering consulting qualifications in China was 18,586, which was a relatively large number.
Distribution of enterprises. The development of the engineering consulting industry in our country is unbalanced. The eastern region accounts for a relatively large proportion. The number of engineering consulting enterprises in Beijing, Guangdong and Sichuan exceeds 1,000.
Background of urban renewal policies
1. Major strategic deployments of the Central Committee of the Communist Party of China
In June 2020, the Ministry of Housing and Urban-Rural Development submitted a special report to the Central Committee of the Communist Party of China, suggesting that "the strategy of improving the quality and efficiency of cities be implemented, effectively connecting the national regional coordinated development strategy and the rural revitalization strategy, and forming a complete national spatial development strategy system." In October of the same year, the Fifth Plenary Session of the 19th Central Committee of the Communist Party of China reviewed and approved the "Proposal of the Central Committee of the Communist Party of China on Formulating the 14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives Through the Year 2035", naming the previously proposed "Urban Quality Improvement and Efficiency Enhancement Strategy" as the "Urban Renewal Action". The "Proposal of the Central Committee of the Communist Party of China on Formulating the 14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives Through the Year 2035" released in November 2020 explicitly proposed the implementation of the urban renewal action, which is a major decision and deployment for further improving the quality of urban development. In October 2022, the report of the 20th National Congress of the Communist Party of China proposed: to carry out the urban renewal action, strengthen urban infrastructure construction, and build livable, resilient and smart cities.
2. Policies are gradually being refined
In 2020, the state officially proposed the "Urban Renewal Action", and in the past two years, relevant policies have been gradually refined. The "14th Five-Year Plan Outline" released in 2021 proposed the "2255" four red lines, namely, the proportion of large-scale demolition should, in principle, not exceed 20% of the current total building area; in principle, the ratio of large-scale demolition to construction in old urban areas should not exceed 2; for large-scale relocation, the rate of local and nearby resettlement of residents should not be lower than 50%; and the annual increase in urban housing rent should not exceed 5%. Large-scale demolition and construction have become history.
Exploration of Comprehensive Renovation Models for Old Residential Areas of Central Enterprises in Beijing
1. Interpretation of comprehensive rectification policies
Overall requirements. The "Comprehensive Renovation Work Plan for Old Residential Areas of Central Enterprises in Beijing" (Guozi Fa Gai Ge [2023] No. 9) issued on January 6, 2023, clearly states that efforts will be made to basically complete the energy-saving comprehensive renovation of old residential areas of central enterprises in Beijing that need to be renovated by the end of 2025, eliminate safety hazards, and improve and perfect supporting service measures. The living conditions of the workers and residents in old residential areas have been significantly improved.
Scope of comprehensive rectification. For residential communities in Beijing that are owned by central enterprises, lack maintenance, repair and management, have outdated facilities and equipment, incomplete functional support and strong residents' willingness to renovate, priority should be given to renovating old communities built before the end of 2000. Priority should be given to renovating old communities with major safety hazards to resolutely prevent major safety accidents from happening.
Comprehensive rectification content. Involving the main body of old buildings and the public parts of residential areas, the basic content and the improvement content are classified and implemented separately. The basic category content aims to safeguard the safety of people's lives and property and meet their basic living needs, as well as promote energy conservation and emission reduction. It includes seismic reinforcement of buildings, insulation of exterior walls and renovation of exterior doors and Windows, waterproofing and insulation renovation of roofs, cleaning and repainting of corridors, renovation of infrastructure such as water, electricity, gas, heat, roads and communications, and renovation of fire protection, security, lighting and garbage classification facilities, etc. Improvement content refers to the rectification content that meets relevant requirements in terms of land use, planning, and building structure, and has obtained the consent of residents and related stakeholders, with the aim of improving living functions and enhancing the quality of life. It includes installing elevators, adding parking and charging facilities, and building supporting service facilities such as elderly care, child care, medical care, fitness, meal assistance, housekeeping, express delivery, and others.
Funding policy. The basic content is self-funded by central enterprises through various means, with appropriate subsidies provided by the government. Among them, the specific plan for self-raised funds shall be reviewed and determined by the central enterprise group company. Central state-owned enterprise groups can apply for financial subsidies. The subsidy standards are a fixed amount of 120 yuan per square meter each from the National Development and Reform Commission, the Ministry of Finance, and the Beijing Municipal Government. The improvement content raises funds through various means such as enterprise support, residents' contribution, and the introduction of social capital for investment and operation. Residents' contribution can be implemented through channels such as special maintenance funds for residential buildings, public income, and donations of funds and materials. It also supports residents to withdraw their housing provident funds for the installation of elevators and other self-occupied housing renovations.
2. Comprehensively address the characteristics and difficulties
The comprehensive renovation work of old residential areas of central enterprises in Beijing is time-pressured and task-intensive, mainly presenting the following five major characteristics:
One is that the area to be renovated is large. The renovation involves 72 households with a total construction area of approximately 22 million square meters, covering 15 districts of Beijing.
The second issue is the tight schedule for the renovation. By the end of 2025, the comprehensive energy-saving renovation of old residential areas of central enterprises in Beijing that need to be renovated will be basically completed.
The third issue is that the renovation is highly challenging. We will focus on renovating old residential areas built before the end of 2000, giving priority to those with major safety hazards for renovation, and resolutely hold the bottom line of not allowing major safety accidents to occur.
The fourth issue is the mixed property rights of houses. It involves central-central mixed assets, central-state mixed assets, central-local mixed assets and central-private mixed assets, etc.
The fifth point is that there are many objects to coordinate. It is necessary to coordinate the demands of multiple parties including central ministries and commissions, various departments of Beijing (such as the Development and Reform Commission, the Housing and Urban-Rural Development Commission, the Planning Commission, the Management Commission, etc.), districts, communities and residents, especially the multi-level demands of residents. While promoting the work, efforts should be made to meet the people's aspirations for a better life as much as possible.
3. Exploration of comprehensive improvement models
The comprehensive renovation of old residential areas throughout Beijing is on a large scale, with a total renovation area of approximately 160 million square meters. Enterprises are actively exploring and adopting replicable and scalable implementation plans of "full-process engineering consultation + engineering general contracting + operation", striving to play a guiding and exemplary role in the renovation of old residential areas and urban renewal across the country. At present, the distinctive approaches explored can be summarized in the following aspects.
(1) Establish a dedicated institution
In order to implement the work requirements of the "Comprehensive Renovation Work Plan for Old Residential Areas of Central Enterprises in Beijing" (Guozi Fa Gai Ge [2023] No. 9), a special task force for urban renovation was promptly established to coordinate the central enterprises and various government departments in Beijing to complete the comprehensive renovation tasks of old residential areas. The task force mainly undertakes three major functions: First, it plays a coordinating role in promoting the comprehensive improvement of old residential areas of central enterprises in Beijing. Second, leverage the advantages of the main responsibilities and core business to serve various central enterprises and groups in effectively promoting the comprehensive renovation of old residential areas. Third, we should leverage our innovative and creative capabilities to explore implementation models for the renovation of old residential areas and even urban renewal, and expand paths for the transformation and upgrading of the existing market in the construction industry.
(2) Investment decision-making stage
In the investment decision-making stage, three consulting models, namely long-term management consulting, research consulting and evaluation consulting, are innovatively adopted.
Long-term management consulting. By establishing temporary Party organizations and self-governing organizations in the community, selecting standardized property management companies, and determining basic service contents, a long-term management mechanism for community property management can be jointly created.
Research and consultation. Coordinate the efforts of the renovation task force, property rights units, sub-districts and communities, owners' committees, and property management companies. Sort out the content list from three aspects: residents' demands, public environment, and idle resources, and conduct a comprehensive physical examination of the community. Develop a smart urban renewal platform, fully solicit residents' opinions, ensure precise governance, optimize repetitive work through efficient data analysis, and reduce the number of household visits and disturbances to residents' lives.
Evaluation consultation. Based on the research results, the consulting team issued an assessment report to provide comprehensive support for the renovation plan. The first is to determine the content of the renovation. The consulting unit puts forward renovation suggestions and planning suggestions for the utilization of existing resources, and the property rights unit, in conjunction with the owners' committee, determines them. The second is to determine the financing plan. Financial institutions assist in customizing special financing plans for the renovation of old residential areas, and central enterprise groups and property rights units determine them. The third is to determine the estimated funds. The consulting unit provides an estimated amount of funds that matches the renovation content, which is determined by the central state-owned enterprise group and the property rights unit. The fourth is to determine the organizational model. The consulting unit provides plans such as the scope of the tender and the mode of contracting, which are determined by the central state-owned enterprise group.
(3) Project initiation stage
During the project initiation stage, mainly relying on the "dual inclusion" working mechanism, the "Beijing Central Enterprises' Old Residential Area Comprehensive Remediation Work Joint Conference" was established to remove the bottlenecks in fund application, administrative approval and policy implementation.
Give full play to the role of the "double inclusion" working mechanism for the comprehensive renovation of old residential areas of central enterprises in Beijing, incorporate the comprehensive renovation projects of central enterprises in Beijing into the project list of each district in Beijing, and allocate the relevant subsidy funds to the central enterprise groups. According to the Beijing Old Residential Area Comprehensive Renovation Work Manual, simplify the administrative approval procedures for projects, smooth out green channels, and remove process bottlenecks. Connect with the housing and urban-rural development department of Beijing to smooth out the approval and construction application process. Coordinate with the National Development and Reform Commission and the Ministry of Finance to smooth the disbursement path of subsidy funds; Coordinate with the State-owned Assets Supervision and Administration Commission of the State Council to conduct relevant policy research and formulation.
(4) Construction and implementation stage
During the construction and implementation stage, innovations were mainly made in the implementation plan, organizational model, bidding and tendering, and contract management model.
Clarify the implementing entity and innovate the implementation plan. The specific property rights unit of the old residential area is the project implementation entity, responsible for raising funds and organizing the implementation of the project. Due to the different performance capabilities of the specific property rights units, it is suggested that the project be packaged across property rights units and entrusted to a stronger property rights unit or a third party as the implementation entity. Construction and acceptance should be uniformly organized according to the performance sections to simplify the implementation process. Improve the quality of contract performance.
Explore the organizational model for the performance of the entire process of engineering consulting. Due to the fact that the renovation project spans multiple administrative regions, the performance resources are not centralized and the standards are not uniform. As a result, the approval and construction application procedures cannot be processed in batches. It is suggested that responsibility zones be demarcated by administrative regions, chief consultants be appointed, and independent performance teams be established within the regions. Service standards and approval and construction application procedures should be unified based on the policies of the administrative regions.
Explore the joint bidding model. The joint bidding model breaks the boundaries of group companies, bundling projects that meet the bidding conditions. The involved implementing entities of each group form a consortium of bidders. The consortium selects the leading unit through certain rules, and the leading unit selects a bidding agent to be responsible for the bidding work of the bundled projects. The bidding content mainly includes the whole process engineering consultation and engineering general contracting Ultimately, each tenderer will issue the notice of award and sign a contract with the successful bidder, reducing the number of tenders and the duration of tenders within the scope permitted by laws and regulations.
(5) Property operation stage
Three parts construction and seven parts management. After the comprehensive renovation of old residential areas, whether the living quality can be significantly improved depends on the subsequent operation and management. Therefore, after the project is put into use, the operation work should be transferred to a professional property operation company, and the property rights unit should conduct a post-assessment. The Beijing Municipal Commission of Housing and Urban-Rural Development is responsible for the satisfaction survey, ultimately achieving an efficient and closed-loop full industrial chain service.
Author：Kevin
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