Construction Loan Monitoring

CONSTRUCTION LOAN MONITORING

Arcadis

Arcadis is the leading global natural and built asset design and consultancy firm. Working in partnership with our clients to deliver exceptional and sustainable outcomes through the application of design, consultancy, engineering, project and management solutions.

Arcadis Philippines is the country’s leading provider of construction consultancy services for natural and built assets. We are a firm recognized for creating value for our clients and improving the quality of life, creating solutions based on a blend of services, including Quantity Surveying, Development Management, Environmental Sustainability, Water Consultancy, PPP & Infrastructure Consultancy and Design & Engineering. Having worked on over 600 projects nationwide, covering both the private and public sectors, including infrastructure, residential, commercial, industrial, education, health care, recreation facilities, hospitality and interior fit outs, the company’s experience allows it to continue leading and setting the standards for consultancy services within the Philippine Construction Market.

We also provide construction loan monitoring services to many different financial institutions like local banks, international banks, investors, insurance companies, developers and government agencies. The service we provide as third party independent consultants is to carefully track and monitor our client’s investments / loans to provide assurance that the funds are being used efficiently by the contractor. Arcadis assesses construction projects from pre-construction through to project completion monitoring construction loans on behalf of the lender. To support our clients, we review all works that are carried out on site and we review all the project documentation including programs, drawings, specifications, budget and correspondence. Our primary responsibility as a Construction Loan Monitoring consultant is to look after the interests of our clients and ensure that the finance is being spent in an efficient and correct manner.

Pre-Construction

Initial Construction Analysis

This is a comprehensive review of the construction documents prior to the loan closure. Construction analysis provides a degree of validation and certainty for the lender that the project is accurately estimated and can be constructed within the proposed budget and schedule.

The construction analysis ultimately provides significant value in predicting the potential for success in any construction project. Arcadis provides our clients with a report summarizing the information contained in each of the above documents, as well as any concerns that may affect the project in an adverse manner, such as project delays or change order additions.

Each construction analysis report includes a review of the following documents and information:

1.Construction drawings and specifications

2.Construction agreement

3.Construction costs

4.Contractor qualifications

5.Progress schedule

6.Geotechnical investigation

7.Environmental assessment

8.Zoning and permit documents

Construction Loan Monitoring Services

Once the project commences, our role as a Construction Loan Monitoring consultant is primarily to be responsible for the overviewing of the project as a third party independent consultant and to care for the interest of our client to ensure that the project is completed within budget and schedule.

Therefore, if you have a commercial interest in a development but no immediate control over its construction, our monitoring team will protect your interest and keep you fully informed at all stages of the project. Arcadis will keep a close watch on all aspects of the development and inform our clients immediately if there are any reasons that could impact the funders ability to recover their capital. Arcadis will help our clients to make informed lending decisions by assessing risks and suggesting strategies for mitigation. We work very closely with all our clients to ensure that their expectations are not only met but exceeded.

We have experienced construction professionals who can perform the following:

1.Initially advise on the experience and the capability of the Contractor. Review the contractor’s license, personnel, references and financial information. Review the contractor’s current projects and past performances.

2.Review all contract documents including construction agreement, programme drawings, specification and budget.

3.Review and report on the viability of the contractor’s construction schedule. 4.Assess the construction budget and provide cost reviews. 5.Provide recommendations to the client regarding project feasibility. 6.Analyze the contractor’s monthly payment application complete with all the supporting documentation to ensure that they accurately claim for completed work to date.

7.Compile monthly reports for clients detailing and highlighting if the project is on schedule and on budget. Our reports are well organized and make for easier, fact based risk management decisions. 8.Track budget against actual costs / draws. 9.Monitor the loan balance on projects. 10.Review of funding requests in accordance with construction loan documents and guidelines. 11.Analysis of manpower and plant on the project. 12.Review stored materials and funding requests in accordance with the construction loan documents.

Arcadis

Monthly Project Reports

Our comprehensive reports provide our clients with a clear understanding of the construction project’s performance, and highlights any potential pitfalls that may be impacting the project in real time. The information gathered by Arcadis can then be used by the client as assurance to navigate the administration and disbursement of construction loans with confidence.

Our monthly project reports shall comprise of the following information:

1.Executive Summary – a brief overview of the project.

2.Program and project schedule - percentage complete for last month including percentage complete for previous two months to show a total 3-month progress.

3.Financing and cost – a breakdown of all the drawdowns including amount requested, amount approved and cer tified.

4.Overall Budget – a breakdown of the project budget.

5.Meetings – list of meetings and documentation that occurred in that month e.g. Project Steering Committee Meeting or Project Control Group meetings.

6.List of risks and issues including a mitigation strategy, progress from last month, and status.

7.Master program

8

. Current status compared to forecast program. 9.Manpower – Required and actual.

10.Digital photographs showing photos from last month compared to this month showing a visual aid on progress.

11.Tender event tracking schedule – a summary of the status of trade package tenders in progress.

12.Change orders. 13.Authority permits and approvals.

14.List of issues, actions and decisions required from the projects head management team (e.g. owner, project manager and other key personnel).

15 . Annexures – any other required information deemed relevant (e.g. contractor’s up to date financial report detailing project progress and current situations).

Loan Monitoring Benefits of Construction

Reasonably, the client’s financial interests are protected before and during construction.

Reasonably, the project is completed as designed on schedule and on budget as per owner’s requirements.

Arcadis provide the expertise and resources to manage construction lending risks related to contractual, budget, design and scheduling matters.

Increased project and financial controls.

Early risk identification and appropriate mitigation.

Improved communication on the project.

Continuous improvement throughout the project life cycle.

12th Floor Quadrants B&C, 8 Rockwell Hidalgo Drive, Rockwell Center, Bgy. Poblacion, Makati City 1210 Philippines

T +63 79082888

Talk To Us

Our team of highly skilled professionals make a difference on your project. are waiting to assist you on how we can

9F JEG Tower @ One Acacia, Archbishop Reyes Ave Corner Acacia St. Cebu City

T +63 79082888

Arcadis Philippines Inc

25th Floor, Circuit Corporate Center One Theatre Drive, Circuit Makati, A.P. Reyes St Barangay Carmona, Makati City 1207

Philippines

T: (632) 7908 2888 info-ph@arcadis.com www.arcadis.com