Thursday, 27 October 2016

INFRASTRUCTURAL AND SOCIO-ECONOMIC DEFICIENCIES IN NIGERIA – CHALLENGES OF FACILITY MANAGEMENT ~ ESV. CHUDI UBOSI, FNIVS.

ESV. Chudi Ubosi, FNIVS
It was a meeting of all stakeholders. The facility manager was there, the tenants representatives were there, the development financiers were there. And in one of those complex arrangements which always escape the textbooks our firm was there to represent the interest of a stakeholder with a major in direct interest in the development.

As soon as the meeting kicked off, the facility manager came under intense barrage from all angles – tenants, the financiers, the landlords, etc. Service delivery was poor, cleanliness of the facility was an issue, alternative power supply in times of power failure was erratic, security of the facility was porous, and on and on it went.

I relaxed back in my chair with a tinge of satisfaction. For once I was not on the firing line. But, I asked myself how many of these issues being raised could indeed be said to be the fault of the facility manager. Yes indeed, the buck stops on his table as far as the smooth running of the facility was concerned, but truly in the light of so much infrastructural and social deficiencies in the polity how much responsibility can really be shouldered.

To determine this, it is important to examine the duties of a facility manager. Facility management is in itself, a multi-dimensional discipline that combines the principles of several professions i.e architecture estate management business administration, engineering etc.

A facility manager frees an organization or Landlord from the troubles of running services and operations which are not key to its (his) core business as pertaining the real estate development. At the same time, they are still able to maintain full control of expenditure and policy pertaining to the facility. A facility may be any real estate development undertaken for profit social or monetary profit.

For the purposes of this write-up focus shall be primarily on facilities that are developed for investments and a monetary profit motive. Facility management entails amongst others, collection of rents, keeping an asset and records, ensuring the renewal or determination of leases within the facility, regular inspection of facility to ensure that lease convenants are being complied with.

The facility manager also ensures through regular inspections that the facility is being cleaned and the functionary of assets i.e. generators, lifts, etc. The facility manager is also responsible for security, insurance of the building, and in the final analysis, ensures that the building is optimally used.

The foregoing in a nutshell is just a tip of the functions of a facility manager. These functions are facilitated by the payment of a service charge. This service charge account is used to run these facilities and regularly a statement of account is rendered for the owners of the facility to appraise.

Back tracking to the focus of the write-up, why is facility management such a challenge in our environment? One of the major challenges of facility management is the issue of non-existent or erratic power supply. All major facilities in Nigeria are developed with provision for a generator, sometimes two as a backup. In ensuring that these generators serve their purpose, tonnes of the service charge are spent on purchase of diesel. The major problem is what quantity of diesel should be bought, when the estimated blackout periods cannot be known. It would also be foolish to estimate that power supply would be out 24 hours a day, as then the cost of the services would then be unwieldy high.

A major problem for facility managers is how to balance the use of the service charge with the provision of services to the satisfaction of the facility owners and its users. This is usually because from experience everything comes at a huge cost. As is commonly said, providing these services is sometimes like running a mini local government. It also does not take much for the service charge to be exhausted and the facility occupiers to lay complaints. For example, would the facility manager be justified in running the generator in an office complex on a Sunday, for a single tenant who insists that is the only day of the week he can communicate with his foreign partners. Would the facility manager be justified in switching on the generator in a 12 house estate, during the day when everybody is at work apart from a couple of housewives and stewards?

The poor attitude to work of many Nigerian employees is a major problem for facility managers. Many see their jobs especially at the middle and lower levels as a stepping stone and/or part time and so commitment to the corporate ideals and objectives is non-existent. In such a setting and with a mindset of that nature, the race to make a “quick buck” is prevalent and so “petty cash/service charge racketeering” is the norm. Many purchases are over invoiced to make allowance for some profit to the employee. The facility manager has to be extra vigilant not to lose most of his service charge account to these staff. Many would be familiar with the artisan that has handled the same complaint over 3 times within a short interval. The original complaint keeps rearing its head in different formats because the artisan has refused to tackle or has not identified the root cause of the issue.

Another major challenge in facility management is that of dealing with the public utilities, i.e. water, electricity and the local authorities. The Power Holding Corporation of Nigeria (PHCN) staff will deliver bills that in most cases are not in sync with reality. These bills have no correlation with consumption in the facility and the next step of the Corporation is to disconnect supply from the pole, without due cognizance to customer service or any such niceties. Thereafter the facility manager is asked to go and make substantial payment on the erratic bill before any attention can be given to his complaints. Experience has shown that success with the further processing of the compliant is generally poor. In virtually 100% of our facilities water supply is by privately dug boreholes, with water treatment plant etc to supply portable water to the facility. This comes at huge costs maintenance wise.

Apart from the problem of poor service provided by the public utilities, there is the poor attitude of occupiers/tenants of these facilities to the keeping of covenants of the contract of the occupation of the facility. Rental obligations are hardly met on time, payment of service charge, after the first one is paid upon taking possession is nil. Once these rental and service charge obligation are not met, it becomes difficult for the facility to be optimally run. The subsisting laws by which these recalcitrant tenants/occupiers can be evicted or forced to pay up are outdated. Added to this is the fact that the courts processes are frustratingly slow and justice can sometimes take years, to obtain. This in itself discourages most facility owners from going to court whilst it indeed encourages tenants/occupiers to be recalcitrant.

Following on this of course are the fraudulent facility managers, who will never render statements of accounts as to the use of the service charge to the facility occupiers. Again, in most cases, the worst penalty suffered maybe just a slap on the wrist, because at the end of the day very few people would like to put themselves through the frustration of our judicial system.

The question now arises as to how some of these challenges can be mitigated to ease the management of facilities. The truth is that problems of facility management cannot be totally eradicated, but by best practices they can be brought to a minimum.

One of the major issues which must be dealt with at the onset and which if handled wrongly can have long term adverse effects on the facility is that of tenant/occupier qualification.
Tenant qualification ensures that only the right caliber of tenants i.e. are allowed to take up leases or even purchase space or property within a facility. It is not only the ability to pay the immediate rent that is important. The long term prospects of their business enterprise, etc are critical.

There is also an urgent need for the review of the laws as they relate to Landlord and tenant issues. The laws in place today are outdated. A situation where a tenant / occupier fails to meet his / her obligation in terms of rent or payment for services, and then deliberately ties up a case in court for upwards of 2 – 3 years can only spell doom for such facilities. The long term implication is that it could even discourage further developments by prospective developers. Tenants/occupies must understand the need to pay their dues and if for reasons of business downturn or other negative issues, are unable to do so, they should vacate their space within 3 – 6 months. The Lagos State Judiciary, for example, has introduced a novel procedure called “front loading”. The essence is to ensure the faster disposal of litigation.

One of the major issues that would greatly ease the challenges of facility management is the successful working of our public utilities and infrastructure i.e. water, electricity, security etc. These services which are taken for granted in many developed countries are usually a luxury here in Nigeria and more often than not 75% of the service charge collected is used in providing these services for the facility. It is also very important that facility managers are involved in facility development, preferably from the site acquisition stage. The reason is not far–fetched. As the professional who will oversee the efficient running of the facility, his contribution at all stages design, construction etc, are critical as he can identify design or construction issues that would create costly management problems in the future. These when dealt with at the right time always end up saving future management costs or reconstruction.

There is a need for increased investment of all stakeholders in the training of artisans and lower level workers in terms of ethics, productivity and orientation. Their attitude, quality and quantity of output can sometimes hamper facility management. Greater emphasis should be placed on the practical aspects of their training in our technical schools.

Finally in running the service charge account, the facility manager should be opaquely transparent. All purchases on behalf of the facility should be receipted and a quarterly/bi-annual statement of accounts be sent to all stakeholders. The practice these days is sometimes to even involve one or two of the tenants/occupiers of the facility by way of oversight functions to assure the rest of the facility users about the judicious use of their service charge. What this also does for the facility manager is that it reduces the pressure and accusations of non-performance.

It is also customary these days to introduce a separate account for diesel consumption and generator maintenance. This is due to the unpredictability and erratic nature of the public power supply. Experience has indeed shown that most service charge accounts are exhausted with 3 months because of diesel purchase. A separate account makes it easier for the facility users to see where their money is going.

In conclusion, the major challenges of facility management in the Nigerian environment are primarily a function of the absence of good infrastructure. The foregoing has highlighted these, and truth be told, even the cost of housing is likely to drop with efficient functioning of our public utilities.

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