Big Project ME by Big Project Middle East

AUGUST 2013

089

ALSO INSIDE EDUCATION SPECIAL CRANLEIGH STUDIED OMAN ANALYSED BIM CONNECTION

it’s All Part of the pl an Al Futtaim Engineering outlines its growth strategy for the GCC

M MIDDLE EAST

CONTENTS

AUGUST 2013 09

The Big picture

DMCC to build world’s tallest commercial tower

JLT tower to surpass Taipei 101 and One World Trade Centre

News analysis

Labour drain

How KSA’s Nitaqat scheme is impacting the construction industry

18 In profile

it’s all part of the plan

Al Futtaim Engineering outlines their strategy for GCC growth

24 EDUCATION SPECIAL: THE INDUSTRY SPEAKS

knowledge is power

Examining the impact of the education sector on construction

EDUCATION SPECIAL: Site visit

out of culture comes strength

Cranleigh Abu Dhabi aims to set the benchmark for education

Market analysis

Sultanate of growth

Why the Omani market could be a sleeping giant awakening

36 Special feature BIM connections

How BIM can help collaboration during the construction process

40 Special feature cost control and Bim

Bringing cost control software and BIM together

46 CPD modules early contractor involvement

Studying how ECI can benefit construction projects

Tenders

Top tenders

Listing the Middle East’s biggest tenders for August

58 Constructive criticism A little education goes a long way Is Abu Dhabi moving towards a knowledge-based economy?

PAGE 32

AUGUST 2013

MIDDLE EAST

Can Oman be both a tourist destination and a construction hotbed?

DE M ON ST RA TI ON S

16-20 February 2014

DAMMAM

Dhahran International Exhibition Center, Dammam, Kingdom of Saudi Arabia Show timings: 9:30-12:00 and 16:00-22:00

The Construction Machinery Show 2014 is the largest heavy construction machinery event in the region, showcasing a wide variety of products ranging from heavy equipment to machinery, from lighting to generators as well as dealers and service providers.

action via its programme of live demonstrations and the largest ever showcase of its type in the Middle East.

The event will provide an invaluable platform for customers in the Arab world bringing together manufacturers, distributors and buyers.

In 2014, the Construction Machinery Show 2014 is teaming up with leading Saudi exhibition organiser, Dhahran International Exhibitions Center (DIEC). This yearâ&#x20AC;&#x2122;s show will run in conjunction with the popular BUILDEX event, now in its 16th year.

The Construction Machinery Show 2014 is also the only event in the region where buyers can see a huge range of equipment in

Both events will attract worldwide industry experts, investors and buyers to the largest tradeshow in the Eastern Province.

Raz Islam Publishing Director raz.islam@cpimediagroup.com Mobile: +971 50 451 8213

Michael Stansfield Commercial Director michael.stansfield@cpimediagroup.com Mobile: +971 55 150 3849

EDITOR’s COMMENT

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Lessons for KSA There is estimated to be 12 million expatriates to be working in Saudi Arabia, or at least there used to be. Official figures are currently vague as to how many people have been forced to leave the Kingdom since it introduced a crackdown on the black market for labour but current best guesses stand in the region of one million. You don’t have to be a maths genius to realise that almost 10% of the expat workforce has flown the country before being forced to...or pay fines or, worse, find themselves in prison. In a country that is used to seeing change happen at the same rate that geologists register for the Indian sub-continent heading towards Asia the effects threaten to be seismic. Before the start of April’s grace period for illegal workers there were an estimated 250,000 construction contracts in motion. The 575,000 corrections to visa statuses has not been enough to stall the labour market and the reverberating aftershocks have rocked the sector. The National Committee in Saudi Chambers (NCSC) says that 90,000 contracts have been cancelled. Presumably because they were unable to fulfill their contracted obligations. The cost of this will surely be higher prices in terms of contracts and a subsequent shrinking in the number of contractors in the market. The goal of this move has been to reduce wastage in the Saudi labour force as well as accelerating the Nitaqat programme. Only the very cynical could argue against both those aims but I worry that the extension of the grace period to November has come too late for the sector. As the construction industry bears the brunt of these changes, smaller contractors must once again realise that they will pay the price in the short-term for long-term neglect of their role as responsible employers.

Stephen White

Group Editor

Publisher Dominic De Sousa GROUP COO Nadeem Hood Managing Director Richard Judd EDITORIAL GROUP EDITOR stephen white stephen.white@cpimediagroup.com +971 55 795 8740 deputy EDITOR GAVIN DAVIDS gavin.davids@cpimediagroup.com +971 4 440 9118 features EDITOR JONATHON SAVILL MARKETING & ADVERTISING PUBLISHING Director RAZ ISLAM raz.islam@cpimediagroup.com +971 4 440 9129 COMMERCIAL DIRECTOR MICHAEL STANSFIELD michael.stansfield@cpimediagroup.com +971 4 440 9128 SALES DIRECTOR CARLO MENEZES carlo.menezes@cpimediagroup.com +971 4 440 9151 SALES MANAGER CAROL D’SOUZA carol.dsouza@cpimediagroup.com +971 4 440 9163 MARKETING MANAGER CAROLE MCCARTHY carole.mccarthy@cpimediagroup.com +971 4 440 9157 DESIGN ART DIRECTOR STEVEN CASTELLUCCIA steven.castelluccia@cpimediagroup.com +971 4 440 9121 SENIOR GRAPHIC DESIGNER REBECCA TEECE rebecca.teece@cpimediagroup.com +971 4 440 9168 JUNIOR GRAPHIC DESIGNER PERCIVAL manalaysay CIRCULATION & PRODUCTION Circulation and Distribution Manager ROCHELLE Almeida rochelle.almeida@cpimediagroup.com +971 4 368 1670 Database and Circulation Manager Rajeesh M rajeesh.nair@cpimediagroup.com +971 4 440 9147 Production Manager James P Tharian james.tharian@cpimediagroup.com +971 4 440 9146 DIGITAL www.bigprojectme.com Digital Services Manager Tristan Troy Maagma Web Developers JOEL AZCUNA JANICE FULGENCIO online@cpidubai.com +971 4 440 9100 Published by

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While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

AUGUST 2013

NOVEMBER 25, 2013 JUMEIRAH EMIRATES TOWERS, DUBAI

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THE BIGGEST PICTURE

DUBAI Multi COmmoDITIES CENTRE TO BUILD

world’s tallest commercial towER

big project, big numbers Dubai’s tallest towers (current buildings only): Burj Khalifa 828m Princess Tower 413m 23 Marina 392.8m Elite Residence 380m Almas Tower 360m JW Marriott Marquis Dubai towers 355m

107,000sqm business park is set to be built around the tower, which will aim to attract large regional corporations and multinational firms DMCC chief says The Dubai Multi Commodities Centre (DMCC), the master developer of Jumeirah Lakes Towers plans to begin building a new business park which be home to the tallest commercial tower in the world. The DMCC business park, comprising of 107,000sqm of commercial and retail space, is currently in the concept design phase, including the design for the world’s tallest tower. The developer has so far declined to give details on the height, location or when work will commence on the tower to the local media. Ahmed bin Sulayem, Executive Chairman of DMCC, said: “The world’s tallest commercial tower and the DMCC Business Park are the next natural steps to ensure we continue to welcome companies to the free zone as demand grows – particularly large

regional corporations and multinationals – in the near future. The initiative is designed to further strengthen Dubai’s position as the global hub for commodities trade and enterprise.” In 2005, DMCC launched a ground breaking gold sukuk, raising $200 million to help finance the construction of its commercial towers. With 65 mixed-use commercial and residential towers and over 180 retail outlets in operation, there are currently over 65,000 people working and living within the JLT development. Taipei 101 in Taiwan currently holds the record for the tallest commercial tower in the world. It was completed in 2004 and is 508 metres high with 101 floors, according to figures released by the Council of Tall Buildings and Urban Habitat (CTBUH).

One World Trade Center in New York City, US, will become the tallest commercial tower in the world in 2014. It will be 541m high with 104 floors. Ping An Finance Center in Shenzhen, China, will take over the top slot in 2016. It will 660 metres high and will house a total of 115 floors. Al Hamra Tower in Kuwait City, 413 metres high with 80 floors, is the tallest commercial tower in Middle East. Almas Tower in Dubai is placed second on the regional list. Completed in 2008, the 68-storey tower is 360m high. Dubai is also home to the world’s tallest building, the Burj Khalifa, which is 828m tall, the world’s tallest residential building; the Princess Tower (414m), the world’s tallest hotel; the JW Marriott Marquis (355m).

AUGUST 2013

MIDDLE EAST

Big Project ME talks to al futtaim engineering about ITS growth strategy in the gcc – Page 18

THE BIG PICTURE

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Qatar sentences five people blamed for Villagio fire Qatari ambassador to Belgium amongst the sentenced for fire that killed 19 in May 2012

Casablanca plans to build $1 billion SkyTrain Metro through heart of city Transportation project scheduled to begin work in January 2014, Casablanca Mayor says Casablanca has announced plans to build North Africa’s first elevated metro line, the city’s mayor, Mohamed Sajid, has announced. Construction on the project is scheduled to begin in January 2014, and is scheduled to be completed by late-2016, he added. The cost of the 15km – 18km suspended metro is $1.04 billion, and it will be partially financed by the French Development Agency (AFD). The tracks will be built on concrete arches, allowing commuters to avoid traffic congestion. The route will link the neighbourhoods of Sidi Moumen and Hay Moulay Rachid to the downtown Casablanca area, and up to the Bourgogne neighbourhood.

“The city is making progress, and its infrastructure and transportation network are improving,” local resident Khalid Kefili told Magharebia, the North African news website. “Casablanca is certainly not as it was 20 years ago. We like the idea of linking shantytowns to modern neighbourhoods,” he added. “It will be good to have a tramway and metro,” Hay Mohammadi resident Salaheddine agreed. “The town has turned into a place for chaos and noise.” The congestion problem did not end when the 31-kilometre Casablanca tramway line opened last December. It can only accommodate 250,000 passengers each day. The metro, however, will be able to carry up to 400,000 passengers daily, La Vie Éco reported.

A Qatari court has sentenced five people, among them the country’s envoy to Belgium, to six years in prison over ‘negligence’ that caused a deadly fire that killed 19 people at the Villagio Mall in Doha. According to a report by Al Jazeera, the defendants will have the right to appeal, and will remain out of custody until the end of that process, which could last a year. The mall fire on May 28, 2012, saw 19 people killed, including 13 children, four

teachers and two fire-fighters. Among the children who died were triplets from New Zealand and three Spanish siblings. All the victims were expatriates. Investigators said last year that the fire was caused by an electrical fault. It had broken out next to the unlicensed Gympanzee nursery in the Villagio Mall. Amongst the accused is Sheikh Ali Bin Jassim al-Thani, co-owner of the nursery and Qatar’s ambassador to Belgium. The rest include a second co-owner of the nursery and members of the mall’s management team, who were unnamed. According to the panArab broadcaster, two other defendants – the mall’s assistant manager and head of security – were cleared of all charges.

Patent holder for Qatar stadium cooling technology issues copyright warning Aspire Zone Foundation issues ‘intellectual property rights warning’

19 number of people killed in the Villagio fire

Aspire Zone Foundation, the patent holders of the stadium cooling technology that Qatar intends to use for the 2022 World Cup, has issued a warning against potential copyright infringement. Daily adverts in UAE papers have seen the firm reiterate its ‘exclusive owner of intellectual property rights relating to the innovative engineering concept concerning the design of the new airconditioning control system inside football courts and open spaces’. “The company reserves all its legal rights, both civilly and criminally against whoever deals in such units or devises with no prior approval from Aspire Zone Foundation,” the company said.

MIDDLE EAST

Big project me examines how the educational sector impacts regional construction – page 24

AUGUST 2013

THE BIG PICTURE

Ashghal awards construction contracts for $549mn worth of education projects Eight companies awarded 11 contracts, which have a completion deadline of Q4, 2014 Ashghal, the Qatari Public Works Authority, has awarded contracts worth more than $549.2 million for the construction of 44 new schools, including 15 kindergartens, across the country. Nasser Ali al Mawlawi, president of Ashghal, said that eight companies were awarded the 11 contracts, which had a completion deadline for the fourth quarter of 2014. He added that Ashghal would work closely with the Ministry of Education and other relevant government bodies to develop more schools and facilities over the next few months. “In line with the Qatar National Vision 2030, Ashghal is committed to supporting an advanced educational system by building modern and technologically advanced institutions across the country,” he explained to local media representatives.

Al Mawlawi insisted that Ashghal would ensure that all institutions would be completed on schedule, pointing out that education was vital for Qatar’s social progress. He added that Ashghal had delivered 26 schools and kindergartens worth $274.6 million in 2012. Before the beginning of the next academic year, the authority would hand over 16 educational institutions, including kindergartens, worth a combined value of $121.3 million. The new schools will have IT laboratories, sport and recreational halls, activity rooms, libraries and classrooms. “Their design is in line with the Qatari specifications for people with special needs, equipped with ramps at entrance and exit, and special specifications for bathrooms and other areas,” he said.

Phase II design of Sharjah’s Central Transport Station complete $4 million terminal station will connect public bus routes and provide a range of services for public transport Sharjah Transport has completed the second phase of designing the new Central Transport Station, which will be located in the Union Square area adjacent to the King Faisal Mosque in Sharjah city, it has been announced. Estimated to cost a total of $4.08 million, the station is still in its design phase. It will cover 19,000sqm and will provide a range of services for public transport, said Abdullah Mohammed Al Zari, director general of Sharjah Transport. The station will replace the existing Central Transport Station located in the area and will connect public bus routes within the city to bus routes between Sharjah and other emirates. A Sharjah International Land Transport station will also be part of the CTS facilities, Al Zari said. No date has been set for the construction of the project, the director general added. While over 100,000 bus trips were made last year in Sharjah, there has been a sharp rise in passengers. The first quarter of 2013 saw over 51,000 trips.

sqm Total area of the PLAnnED BUS CTS in Sharjah

KSA firms plan labour renting scheme to resolve building crisis Three Saudi companies will hire out workers on a short term basis to contractors Three Saudi Arabian companies, comprising of 13 recruitment firms, plan to hire out workers on a short-term basis to contractors in the Kingdom, in a bid to overcome the ‘building crisis’ affecting the country. Recruitment companies will supply workers for up to a year to construction companies looking to complete their projects, while also supplying workers to other companies that need short term labour, industry experts explained to Arab News. The move will bring relief to a Saudi construction industry that is struggling with a shortage of labour. The launch of the hiring-out programme will take place at the end of the much discussed amnesty period for workers.

AUGUST 2013

MIDDLE EAST

big project me finds out whether oman’s construction market has reached its potential – page 32

THE BIG PICTURE

JBR appeal wanes as construction work bothers residents Residential area drops to 10th in ‘most searched’ locations on residential property website

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Disruptive construction and traffic jams have seen renters turn away from living in Jumeirah Beach Residences (JBR), a popular local real estate website has said in a report. “Ongoing construction projects around the area have dampened the appetite of possible tenants,” says Renan Bourdeau, the managing director of property website: www.propertyfinder.ae. “Major road construction work has resulted to traffic build-up, as well as the loss of beach access and views of the sea for residents – two of JBR’s unique selling points,” Bourdeau remarked. Because of these, it has been rather difficult to entice potential tenants to look into renting a property in the area.” The residential area is also lagging behind when it comes to customers looking to purchase, rather than rent, with the website also ranking it at ten in terms of locations people are searching for. However, Bourdeau said that while the region isn’t faring well at the moment, the future prospects for the area look bright. “By 2014, a 5,000sqm boutique mall – The Beach – is expected to rise in JBR, featuring over 40 food and beverage outlets, retail shops and entertainment facilities.” Another mixed-use development, the $1.63 billion man-made Bluewaters Island project, is also being constructed off the coast of JBR, which will offer additional accommodation, hospitality, retail and entertainment options to Dubai residents.

AUGUST 2013

bigprojectME.com

Qatar to invest $200bn into construction by 2022 Projects being built to help drive regional tourist arrivals in Qatar as well as for the World Cup, Deloitte report says

$200 BILLION to be invested in construction projects by 2022

Amount Qatar will invest into transport infrastructure

INTENDED PROJECTS TO BE DEVELOPED IN 2013/2014

Percentage by which tourism numbers will grow annually

$20 BILLION Amount to be invested into tourism infrastructure

Expected number of annual tourists by 2022

Phase one of Moscow’s Zagorodny Kvartal 35% constructed, SAY Limitless Dubai developer says that four apartment buildings and 26 townhouses are on track to be completed this year

ranking of JBR on propertyfinder.ae

Construction of phase one of Zagorodny Kvartal, the Limitless joint venture community project near Moscow, is 35% complete, it has been announced. Four apartment building and 26 townhouses are on track for completion this year, the developer said. Covering 14 hectares, and due for completion in 2015, phase one of Zagorodny Kvartal includes 14 residential towers that contain 728 apartments, 46 townhouses, retail facilities and an 8,000sqm park. Seven apartment buildings, all townhouses and infrastructure work are currently under construction, with 300 workers on site. Located 24km north-west of Moscow, Zagorodny Kvartal – meaning Country Quarter – is

being constructed alongside the Moscow Canal. Spanning 111 hectares, Zagorodny Kvartal’s overall master plan features 5,500 apartments, nearly 470 villas and townhouses, school, kindergartens and a commercial centre. The community will accommodate more than 14,000 people when fully complete. Highway upgrades, currently underway, will provide quick, congestion-free routes to and from the Russian capital, and a new high-speed toll road will provide easy connections to St Petersburg. End users in Russia have purchased over 200 homes at Zagorodny Kvartal, which is being sold in phases with a UAE launch coming soon.

Lighting object Alaris and Crystal Mirror, design concept by Jaroslav Bejvl Jr.

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PRECIOSA GULF FZCO JAFZA View LB 19, Office 2407 Jebel Ali Free Zone, P. O. Box 18185 Dubai, United Arab Emirates P + 971 4 884 8234 F + 971 4 884 8235 E sales@gulf.preciosa.com

www.preciosalighting.com

THE BIG PICTURE

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WHAT are The 10 Most Common Construction Site Injuries?

According to the Centers for Disease Control, construction is one of the most dangerous industries to work in. Workers can help prevent these incidents from occurring by being aware of the common construction site injuries that are suffered, as well as through stressing safety in the workplace

Unfortunately, for workers in particularly hot areas, heat stroke can pose an additional on-the-job hazard. Overexertion and sun exposure, especially in the heat of summer, can cause workers to suffer a heat stroke, which comes with nausea, light-headedness, and often fainting.

Source http://www.thesnowlawfirm.com/blog/10-most-commonconstruction-site-injuries/

Heat stroke

Injuries to the spinal cord These construction site injuries are often suffered because of falls on the build site. Spinal cord injuries can lead to disabilities and brain damage.

Cuts and lacerations Construction workers often suffer cuts and lacerations to the skin due to poorly maintained or defective tools, unsecured machinery, exposed nails, and other on-site hazards.

6 2

Limb or digit loss Construction sites are full of heavy objects, materials, and pieces of machinery. If one of these falls on or traps a worker, it can easily cut off a limb, finger, or toe.

Head injuries Head injuries are often suffered on construction sites due to falling objects, tools, or materials, especially for workers who are digging or building from the bottom up.

Loss of hearing

MIDDLE EAST

Vision loss Improper handling of or exposure to on-site chemicals, gases, and other hazards can pose a risk to workers’ vision. In some cases, prolonged exposure can complete vision loss.

If workers fail to wear earplugs while operating jackhammers or other extremely loud equipment, they could affect or lose their hearing.

9 5

Burns and scarring

Stress injuries

Burns are one of the most common construction site injuries around, mainly because of the likelihood of fires and explosions onsite.

Constant lifting, bending, or moving in a certain way can cause stress injuries over time. These often occur in the back and can have lifechanging effects for the worker.

AUGUST 2013

Broken, fractured, or crushed bones Bulldozers, cranes, and other equipment, if not secured properly or operated correctly, could inflict serious injury on workers.

from all of the t e a m a t

w w w.it e chho ldin g.co m

NEWS ANALYSIS

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The Labour Drain Saudi Arabia’s controversial ‘Nitaqat’ scheme has caused divisions across the labour market in Saudi Arabia and beyond. Big Project ME investigates the programme to gauge its impact on the Kingdom

MIDDLE EAST

arlier this year, the government of Saudi Arabia announced that it planned to implement a ‘labour sharing’ scheme to resolve a building crisis of its own making. The scheme will see three companies, made up of 13 recruitment firms, hiring out workers on a short-term basis to contractors in the Kingdom. This is the latest attempt by the Kingdom to resolve the chronic unemployment problem that has plagued the country for a number of years and resulted in numerous efforts by the government to implement different ‘Saudisation’ measures. However, previous attempts have failed to produce the desired results, and so the infamous ‘Nitaqat’ measure

AUGUST 2013

was introduced by the Saudi ministry of labour in 2011. This system will have a far reaching effect on expatriates working in the Kingdom, specifically the huge migrant labour force working on numerous construction projects across the country. The scheme will see the labour market divided into 41 activities, with each activity divided in five sizes (Giant, Large, Medium,

Small and Very Small), to have a total of 205 categories, explains Hany Kenawi, a consultant with the legal firm MeyerReumann & Partners, in a report entitled ‘Nitaqat: the New Localisation System for Jobs in the Kingdom of Saudi Arabia’. “The performance of the establishment in the localisation of the jobs is to be evaluated compared with the similar establishment’s activity and

“The motive of applying the Nitaqat system is to make the appointment of Saudi citizens represent a competitive advantage”

NEWS ANALYSIS

n 41 Number of

activities the labour market has been broken down into

n 5 Number of ‘sizes’ each activity has been divided into

n 205 Number of

categories in total across the labour market

n 75,000 Number

of Indian workers facing deportation in KSA

n 500 Number of exit visas being issued by Saudi authorities daily

n 15% Percentage rise

in wages after the Nitaqat scheme was introduce

NiTaQat problems SE Asian governments have criticised the scheme.

“The problem lies with the sudden manner in which the decision was introduced, not the decision itself”

remains concerns over its ability to generate jobs for the Saudi population in the long term, in addition to a number of other issues. Local contractors have already blamed the programme for a rise in construction costs, while also pointing out that their wage costs have risen by as much as 15%, a reflection of the high cost of Saudi manpower, as compared to foreign nationals. They said that they have not submitted bids for new works because of the uncertainty over the legal status of their foreign construction workers. Abdullah Alwan, CEO of SMT Properties in the Kingdom, said that many companies were afraid their workers would be arrested or deported. “The problem lies with the sudden manner in which the decision was introduced, not the decision itself,” he explained. Alwan urged the government to provide incentives for the construction industry, because of the difficulty of finding Saudi construction workers. Bander Al Twaim, a private company owner, added that a number of projects in the Kingdom have had to be stopped completely because property developers have been employing workers not under their sponsorship, which has caused massive losses and a rise in costs for developers, particularly with projects that are close to completion. He did concede that it was clear that the government was serious about reforming the country’s labour market, given that no industry had been spared from having to comply with the Nitaqat programme. For better or for worse, the controversial programme looks to be here to stay for KSA, despite the many questions that remain. It’s still too early to accurately judge the impact of this law on the economy, but it is clear that it is already changing the way business is done in the Kingdom. n

AUGUST 2013

MIDDLE EAST

nitaqat by numbers

size in order to have a fair standard for the evaluation,” he explains further. “After the evaluation, Nitaqat classifies these establishments into ranges (Excellent, Green, Yellow and Red) based on the ratio of the citizens working in the establishment. The Excellent and Green ranges, which are the ranges with the highest localisation ratios, will be rewarded, while the system deals firmly with the Red range, which is the range with the lowest localisation ratio and gives more time for the Yellow range to adjust their positions, being the medium range.” “The motive of applying the Nitaqat system is to make the appointment of Saudi citizens represent a competitive advantage for the establishments in the Kingdom,” Kenawi adds. The fallout from this has resulted in thousands of workers (possibly as much as one million, according to reports as Big Project ME went to press) being returned to their parent nations, which in turn has prompted severe criticism from political parties in those countries. In India, both ruling ministers and opposition party members have united to criticise the measure, warning that the situation could become ‘unmanageable’ due to the number of workers involved and demanding the implementation of the plan be halted. At present, some 75,000 Indian workers are set to return home. Those numbers could go up rapidly. The deadline for expatriates who are in Saudi Arabia without valid paperwork was 3 July, 2013 and has now been extended to November. Once the grace period ends, those workers without valid paperwork will be heavily penalised, or even jailed. Indian External Affairs Minister, Salman Khurshid, said that “the issue is that we have three months of grace period during which whatever needs to be done has to be done and the numbers are very large.” A further problem is the rehabilitation of these workers in their home countries, he said, adding that the Indian government was concerned with the pace of Saudi authorities who were issuing 500 exit permits per day, the report said. While the Nitaqat law has achieved some success in its early stages, there

MIDDLE EAST

IN PROFILE Dawood Bin Ozair & SS Murali

AUGUST 2013

bigprojectME.com

IN PROFILE Dawood Bin Ozair & SS Murali

it’s all part of

the plan

Gavin Davids speaks to Al Futtaim Engineering’s Dawood Bin Ozair and SS Murali to find out what’s ahead for one of the oldest players in the UAE

“there’s going to be more careful thought, planning and utilisation of alternative energy solutions...significant changes”

for supplying products, new projects for execution within the region. Qatar and the UAE are areas where we have won projects. We have also done well in the rail sector. We’ve done the Dubai Metro and we’re executing a project for the tram in the Al Sufouh area. We have won a contract for mechanical works with Etihad Rail and we’re working with developers and contractors for the Riyadh Metro. The Doha Metro and Qatar Rail is another focus area. We now have very extensive experience in rail, and that is a key focus area.” Dawood Bin Ozair adds that Al Futtaim Engineering has been undergoing consistent year on year growth, thanks to its successful divergent strategy. This approach has seen the contractor progress into new areas of business, while also developing existing facets. “We have consistently grown, year-on -year, for the last three years, at almost 15%, on projects in the UAE, Qatar and Saudi Arabia. That’s where our business is based. We’re also in Egypt, but that’s slowed down. In general, we have continuously grown from 2012 to 2013.” With revenues of more than $190.5 million in the last year, Bin Ozair says that his company’s success has been built on the back of a number of major, high-profile projects. Although reluctant to go into specifics, he says that in general, Al Futtaim Engineering deals with projects in the $40 million to $81 million bracket, though they occasionally deal with projects in the $100 million bracket and above.

Al Futtaim Engineering business arms: n Elevators and Escalators

n Air conditioning n Building products n Security and LV systems

n Scaffolding and Formwork

n MEP Projects n MEP Maintenance

CONTINUOUS GROWTH Al Futtaim Engineering posted revenues of more than $190 million in 2012.

AUGUST 2013

MIDDLE EAST

aving been in existence since 1974, Al Futtaim Engineering is rightfully considered as one of the ‘grand old houses’ of the UAE construction industry, having played a formative role in the development of the UAE, and Dubai in particular. Part of the Al Futtaim Group, the division is a multi-disciplinary engineering organisation that operates throughout the UAE and its surrounding GCC neighbours. Having been involved in a number of large-scale projects in the UAE, the company has a wealth of experience in a variety of fields. Its areas of expertise include scaffolding, elevators, security systems, HVAC, facilities management and MEP contracting. “The sectors we’ve been successful in have been in infrastructure, retail, hospitality, healthcare and residential,” says SS Murali, acting managing director, who sat down for an interview with Big Project ME, along with Dawood Bin Ozair, senior managing director, electronics, engineering and technologies. “All these businesses have been key growth areas for us,” Murali continues. “Within those, we have won new contracts

IN PROFILE Dawood Bin Ozair & SS Murali

bigprojectME.com

“The sectors we’ve been successful in the past have been in infrastructure, retail, hospitality, healthcare and residential”

Qatar focus Al Futtaim Engineering will look to target the Qatari market.

MIDDLE EAST

Transport target The rail sector is set to be a growth industry for the Dubai based company.

AUGUST 2013

Furthermore, the company’s FM arm has continued to show significant growth, having recently won a major contract from the ministry of education. The multimillion dollar deal will see it undertake the maintenance of electrical, plumbing, firefighting, fire alarm and civil works for 72 government schools in Dubai and Sharjah. The agreement is in addition to an earlier deal that will see it undertake the maintenance of heating, ventilation and air conditioning facilities in 250 schools in both Dubai and the Northern Emirates. In addition, Bin Ozair says that Qatar is a market that Al Futtaim will be looking at very carefully in the coming years, having already successfully established the brand in the country. “We established ourselves ten years ago, so we’re very well matured in that market. We’re looking to get a fairly large chunk of not only the hospitality, but also the sports and healthcare industries, because there will be a lot of requirements for clinics and hospitals and we have expertise in dealing with these areas. Also, we’ll be involved in the stadiums, the

stadiums are going to be one of the keys to our business in Qatar,” he explains. Bin Ozair says that experience in the UAE will be a vital asset in its attempt to corner the Qatari market. Al Futtaim’s well-versed team can now execute best practices across the region, he adds. SS Murali chimes in, adding that Al Futtaim has always invested heavily in its manpower resources, explaining that it helps them stay ahead of the competition. “We consistenly invest in our manpower resources, and while I wouldn’t say that we are early adopters of all technologies, we look and see what would suit us and help us serve our customers better. Then we invest in that technology. Put simply, we invest in technology, we invest in our people and we train them in an ongoing manner to stay ahead of the game,” he asserts. In mentioning technology, Murali adds that the last few years have seen a significant change in the way the construction industry has approached the adoption of technology, which in turn has shaped the way Al Futtaim Engineering has gone about its business. “I think the industry has changed a lot in the last 15 to 20 years,” he says. “For instance (back then) we didn’t have district cooling, and most of the jobs were focused on residential and tourism projects, hotels and other simple projects. From there we’ve moved on to more complex projects and massive developments, like the Dubai Festival City, which is a development of more than 1,200 acres, or JBR, which is 25 to 30 high-rise apartment buildings which were launched in one go. All of these brought their own challenges, and what we’ve done is: look at it, at what can be done, what we should do to deal with it, and prepare ourselves to meet those needs,” Murali explains. Dawood Bin Ozair adds that district cooling and other energy saving measures

IN PROFILE Dawood Bin Ozair & SS Murali

standards. Most of the consultants that are coming here are from those countries anyway,” he indicates. “Anything that saves money is good. Energy is becoming more expensive and there’s also a shortage of energy, so there’s going to be more and more pressure on the builders and the contractors to provide solutions that can save more energy.” Despite this, Murali says that he’s confident that the industry, and by extension, Al Futtaim Engineering, will rise to meet and overcome the challenges being posed, thanks to the engineering expertise available on the market. “I think that solar would definitely be one thing (that will grow),” Murali adds. “But I think there will be greater focus on spending on what is actually required,” he says. “For instance, if you go and see buildings now, they would be utilising maybe 70% to 80% of their installed capacity, so there’s a big underutilisation of installed plant capacity. I think that there should be serious thought given to installing what is required for a particular development,” he points out. “It could be a hotel, it could be a residential development, but I think there’s going to be more careful thought, planning and utilisation of alternative energy solutions. So yes, there’s going to be significant changes,” the acting managing director predicts confidently. n

Al Futtaim Engineering recent contract wins Awarded two multi-million dollar contracts by the Ministry of Public Works to provide Mechanical, Electrical and Plumbing (MEP) works and civil maintenance work to over 500 buildings across the UAE Deals will see company’s Facilities Management division maintain 334 buildings in the Eastern and Northern Emriates and 189 buildings in Dubai and Ajman. Buildings are a mix of schools, mosques, healthcare centres and hospitals. Al Futtaim Engineering has been awarded a multi-million dollar contract to supply 14,500 air conditioner units by the Dubai Contracting and National Transport Contracting Company. The contract will see the contractor supply SANYO air conditioner units to 786 villas located in Ghyathi, Abu Dhabi. The villas are managed by Musanada – the Abu Dhabi General Services Company, serving the government of Abu Dhabi. Two multi-million dollar contracts with two UAE hotels have been signed by Al Futtaim Engineering’s Building Products Division, which will see TOTO sanitary ware, faucets and accessories being supplied to the Waldorf Astoria Hotel on Palm Jumeirah in Dubai and the Southern Sun Hotel in Abu Dhabi.

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are sectors of the industry that it has long been studying with interest, and is confident that is going to be major growth areas of business. “We are basically well ahead of the industry,” he asserts, “The situation in this business is that the consultant specifies what they’re looking for in the project, and we as a contractor are supposed to install it, as per the consultant’s specifications. Now it also happens that many times we have to value engineer the project and provide energy saving solutions. We completely survey the energy requirements and provide solutions to the contract, which will save energy. That is the value we provide to projects.” “We haven’t just begun doing this, we’ve been doing it for the last four or five years, in stages. Green building solutions are now being talked about, but in principle it has been there (for ages), and we have been assisting that side continuously,” Bin Ozair adds. What’s more, he expects the green building regulations to get even more stringent over the next few years, given the drive for energy efficiency and minimisation of wastage in the region. “I’m 100% sure that these regulations will become more stringent in the future. Ultimately, we’re following the advanced countries. In Europe, USA, Japan, these are already very well established

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EDUCATION IN FOCUS

AUGUST 2013

bigprojectME.com

EDUCATION IN FOCUS

Knowledge is

PoweR

With the education sector set to form a significant chunk of the construction market over the next decade, Big Project ME speaks to the experts examine the impact of the sector

“It (education investment) not only brings stability to the economy, but also diversifies the economy away from depending solely on oil”

high rate of urbanisation. These factors, combined with rising income levels and increased integration with world markets, make the region a high demand area for educational developments,” the report says. “Educational developments sit high on the government agendas and public spending is expected to grow as countries try to improve their economic standing by developing local skills and capabilities.” This is something that Christopher Seymour, a partner and head of Property and Social Infrastructure – UAE at EC Harris, agrees wholeheartedly with, telling Big Project ME that there is now a ‘refocus’ on investing in education as the region has realised the benefits of creating a fully functioning ‘knowledge economy’. “It (education investment) not only brings stability to the economy, but also diversifies the economy away from depending solely on oil,” he explains. “Of course that’s going to be one of the key drivers. Over the next 20 years this is going to be one of the fundamental factors in the economy of the region.” “That’s around universities, by partnering with international universities and aiming funding towards their specific requirements, that does include creating the physical infrastructure, will have an impact on the construction market,” he adds further. “The same is true when we’re talking about education in terms of schools,” he says. “(Although) the context of that also includes a more demographic response,

Education Construction figures n 26 Number of

schools opened in Qatar in 2012

n 44 Number of

schools launched by Ashghal in 2013

n $704 million

Value of contracts awarded by Ministry of Higher Education in KSA

n 10 Number of

university campuses being built in those KSA contracts

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arlier this year, AECOM, the global construction consultancy, released a report entitled the ‘Middle East Construction Handbook 2013’. This report broke down and analysed the major drivers of growth in the Middle East’s construction industry, covering a sectors such as healthcare, leisure and commercial interests. However, one sector that received a significant amount of attention in the report was education, which is only natural, given the importance that sector is going gain as the GCC and its neighbours continue their march towards progress and diversification from their oilbased economies. With a huge percentage of the population under the age of 25, the need for education facilities, right from kindergarten to university level, becomes vital to the future success of the regional economies. As a result, the governments of the GCC, led by Saudi Arabia, Qatar and the UAE, have been investing heavily into the education sector. “The Middle East is characterised by a young, rapidly growing population and a

EDUCATION IN FOCUS

alphonso francis

chris seymour

we’re certainly seeing (progress). In Saudi Arabia, there’s a double headed infrastructure drive, both in research and development and also in infrastructure around education, healthcare and social housing,” he says. “Qatar, in that market, there’s a huge demand in demand brought on by the increase in the expatriate population, driving the need for schools. I think 26 schools were opened in 2012, while recently Ashghal has launched another 44 schools, so there are a lot of contracts there. That’s certainly going to have an impact on the construction market in that location,” Seymour adds. Alan Robertson, the chief executive for the MENA region at Jones Lang LaSalle, tells Big Project ME that there are two key areas of education that will have a major impact on the development of real estate and construction projects, particularly in terms of residential projects. “The availability of primary and secondary education facilities is a key issue for private individuals and families. It’s something that will be taken into

bigprojectME.com

HIgh demand The region’s rapidly growing youth population is driving education investment.

consideration when they’re deciding where to live, and where they want to buy or rent a house or move for an occupation. Developers will be missing a trick if, in a master planned community, they build lots of wonderful apartments and villas, but don’t have a school, because that will really detract from the attractiveness of it,” he explains. “There needs to be a growth of really good quality educational facilities, for different nationalities, at primary and secondary levels,” Robertson adds. “Secondly, in terms of the impact on real estate, on a university level, I think you’ll get joint ventures between academia and industry, which will create employment opportunities and there will also be opportunities for scientific and technological work in the universities, which will be commercialised in science parks,” he says. “We think it’s still in its infancy in this part of the world, but we see that developing considerably in the years to come.” Briji V Rag, a project manager with Airolink International Construction, a Abu

“The Middle East is characterised by a young, rapidly growing population and a high rate of urbanisation. These factors make the region a high demand area for educational development”

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Dhabi-based contractor, points out that education construction growth is directly linked to the economic development of the region. This is especially true of the increasing demand for regional educational standards to be on par with global education standards, he adds. Currently involved in the construction of the Bright Riders School in Abu Dhabi, which will hold more than 4,000 students and will have more than 140 state-ofthe-art classrooms, Rag says that he sees significant promise in the development of the education sector. “Numerous international educational programmes are being envisioned,” he says. “This certainly gives a promising position to the entire educational sector

AUGUST 2013

EDUCATION IN FOCUS

of the UAE in general. New communities have been completed and there is a steady increase in the population of the UAE. Entrepreneurs and businessmen are coming in with new proposals and offerings; of course many of them are relocating to the UAE, especially from Abu Dhabi and Dubai.” This is certainly true, and is best evidenced by none other than Rag’s client on the Bright Riders project, the NMC Group. Founded by Dr BR Shetty, the group has been known through the UAE and the rest of the region for its work in healthcare, with a number of clinics and hospitals being operated by its NMC Healthcare division. However, Alphonso Francis, the business development manager for Bright Riders School, says that the excessive shortage of schools in Abu Dhabi, along with the need for quality, accessible

“Developers will be missing a trick if, in a master planned community, they build lots of wonderful apartments and villas, but don’t have a school” He adds that the school will be future proofed to leverage on the latest education technologies and allow the project to remain relevant long into the future. The need for future-proofing educational facilities is vital, Chris Seymour says, given that most structures are expected to last for at least 60 years, if not longer. “As a so-called knowledge economy develops, demand develops, so flexibility is the key (for education construction). In building education assets, we see that as one of the key requirements. You’re building assets that ostensibly should last 60 years, though in 60 years, the demands of education and research and development will also change,” he points out. “So in order to get the best use of the assets, it’s necessary to ensure that flexibility and future proofing is included (in their construction),” he adds. This unique combination of demands on education sector projects has led

Higher calling Higher education facilities are major projects in the GCC.

Bright Riders details n 4,100 Total number

of students at school when complete

n 1,700 Current

number of students at school

n 36,000m2 Total plot area of school

n 140 Total number of smart classrooms

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education, prompted the group’s entry into education. “Overall, we see a very positive sign of growth in the region, in the education sector. Abu Dhabi alone needs about 100 new schools over the next seven years, to serve up to 146,000 students,” Francis tells Big Project ME, adding that there are plans afoot for Bright Riders to open other campuses in Abu Dhabi. “The key growth drivers across the GCC will be the increasing population, increasing income levels and rising expenditure for quality education. Increasing private sector participation in the education and government support (for education projects) are also drivers of growth,” he adds. With phase one of the Bright Riders School complete in April 2013, the school currently educates 1,700 students from Kindergarten to Grade Six. Phase two will be completed by October 2013, Francis says.

EDUCATION IN FOCUS

to increased focus on the types of contractors involved in these projects. While it is certainly true that local contractors have been getting heavily involved in the construction of schools, when it comes to the iconic, higher education projects, developers are preferring to hire contractors with a demonstrable track record, Seymour says. “Contractors who already have a demonstrable track record in delivering these types of buildings will be high on the list,” he says. “If they don’t have that (track record), then some have found it beneficial to partner with a foreign contractor who may have operated in the UK, US or Europe. Someone who can bring with it that intellectual capacity to understand how to most efficiently deliver these types of buildings.” “Procurement methods may also change and we’re certainly seeing a certain drive towards design and build and if that becomes a requirement, then the contractors have got to have the knowledge to be able to deliver,” Seymour warns. Furthermore, education projects will have more authority influence and

bigprojectME.com

“Abu Dhabi alone needs about 100 new schools over the next seven years, to serve up to 146,000 students”

constraints, says Briji V Rag. He says that there are additional requirements from the Civil Defence, ADEC, the MOE, KHDA and other authorities and bodies, all of whom are advocating and inculcating various safety standards for design and construction. “Design and construction planning for the education sectors call for stricter safety norms to be considered during the early stages of conceptual design and presentations,” says Rag. “Furthermore, education projects have mostly close deadlines with no extensions of time allowed, due to the constraints of opening the school for the academic year. “Therefore, planning of the project completion and setting milestones are very critical and are made considering these constraints.” n

Saudi Arabia’s Higher Education Minister, Khaled Al Anqari has signed a number of contracts worth $704 million for the construction of new university campuses in various parts of the Kingdom, including three engineering colleges. Al Anqari also announced the opening of 10 new university colleges in Alkharj, Huraimala, Arar, Tabuk and Muzahamiya in the beginning of the next academic year. “These 10 colleges were constructed at a total cost of $533.2 million,” the minister said, adding that it would benefit 30,000 students. “We are also making intensive efforts to develop colleges for girls at a cost of $1.06 billion,” he added. “We have completed a number of such projects in Makkah, Hafr Al Baten, Naeeriya, Tabuk and Jeddah.” Furthermore, Al Anqari said that plans for new projects would include a new community college in Unaizah, an engineering college and a college of computer science and information at Jazan University. A college of engineering and a college of applied medical sciences at Hail University and a college of medicine at Tabuk University would also be developed. A new college of medicine will be established at Baha University; a college of engineering and computer science, a college of science and humanities at Salman University; a college of education (Zulfi) and a college of science (Dawadmi) at Shaqra University. The contracts include staff housing units for

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Northern Border Province University.

AUGUST 2013

FOAMGLAS® Insulation

Tapered roof

(for all flat roofs and terraces)

Just a few yards from the national soccer stadium, the Arzanah Sports Medical Center is prominently located within a new mixed-use community in Abu Dhabi, UAE. The project set out to design a sustainable building which responded to this very public site while balancing the need for a calming, healing environment and a facility organized to provide an integrated multi-disciplinary healthcare facility to serve the community and region. The new LEED Gold designed, 78-bed medical centre will form part of the US$6 billion Arzanah development near Zayed Stadium on Abu Dhabi Island. As thermal insulation the consultant came to the decision to use FOAMGLAS® cellular glass insulation for the roof and some wall application. FOAMGLAS® is produced by Pittsburgh Corning and is free of any harmful blowing agent. It’s well known for it’s extreme durability and highest resistance to any kind of moisture. Due to the 66 % recycling content and use of only renewable energy in it’s production FOAMGLAS gets the highest credits in all environmental ratings and is supported with LEED and Estidama credits. The high compressive strength without creeping and deforming makes it the perfect solution especially in roof areas with garden and terraces.

7 4 3

Arzanah Medical Complex, Abu Dhabi

Client Mubadala Development Company Consultant HDP Overseas Limited, HDR Location Abu Dhabi, UAE Under construction finishing December 2011

Build-up 1 Concrete roof deck 2 Primer coat 3 FOAMGLAS® TAPERED slabs (160 ~ 240 mm), laid in hot bitumen

4 Two layers of bituminous waterproofing membranes 5 Separating / protective layer 6 Gravel 7 Paving

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ON SITE Cranleigh Abu Dhabi

bigprojectME.com

Out of Culture comes strength Big Project ME investigates how the Cranleigh Abu Dhabi School on Saadiyat Island, which is being developed by TDIC, could be the benchmark for future education facilities in the capital

n November 2012, Abu Dhabi’s Tourism Development and Investment Company (TDIC) announced a partnership agreement with Cranleigh School, a UK-based independent school that has been in operation since 1865. Intended to be part of the vast Saadiyat Island development, Cranleigh Abu Dhabi will become the largest school campus in Abu Dhabi, with more than seven

Total size of the project

7 hectares

Total built up area

41,508sqm

Total number of piles

1,818

Total tonnes of steel reinforcement

2,129 tonnes

Structural steel framework

320 tonnes

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hectares of land. It is scheduled to be completed in the third quarter of 2014, and will house more than 1,600 students from the age of 3 to 18 years. The school is part of a wider education focused development, which will see a wide range of educational facilities developed on Saadiyat Island, from a pre-school nursery that will open in 2013, to the New York University Abu Dhabi

AUGUST 2013

campus. The Cranleigh Abu Dhabi School will house specialist facilities for music, science, art, design and technology, drama, dance and sport. “The development of Cranleigh School Abu Dhabi on Saadiyat marks an important milestone in the island’s development into a premier destination, while demonstrating TDIC’s commitment to the development of high-level education,” says Brendan Law, director of Education at TDIC. “With the Louvre Abu Dhabi, Zayed National Museum and Guggenheim Abu Dhabi, as well as the world-class hospitality, leisure and sporting facilities all within a two-kilometre radius of the school, Cranleigh is uniquely positioned to take advantage of these cultural and leisure high spots of Abu Dhabi,” he adds. Recently TDIC announced that groundwork on the project had

ON SITE Cranleigh Abu Dhabi

greater synergy between project systems, design and operational requirements, resulting in high performance buildings, as well as to ensure that the design and construction of interior space fit out will contribute to the overall project’s sustainability objectives and targets. As such, it is easy to see why the project, which is fully owned and funded by TDIC, is set to be a benchmark for primary and secondary educational facilities in Abu Dhabi. “There are numerous reasons why Cranleigh will be regarded as the premier school campus in Abu Dhabi. Children will love the ambience of openness, with ‘village green’ central fields extensive playgrounds and leisure spaces. In addition, the campus layout allows for specialist areas – sport, music, art, drama, dance and technology are all housed in carefully designed buildings, fit for their specific purpose,” Law says. “Academic specialist subjects, such as Science have world class facilities – the three separate sciences (Biology, Physics and Chemistry) are each treated to a separate floor of the Science Building, with tiered seating teaching areas separated from the practical spaces in each laboratory. Furthermore, a 650-seat theatre and a separate lecture theatre will (also be constructed),” he says.

List of contractors: n Early works contractor NSCC International Limited– Abu Dhabi

n Architect Godwin Austen Johnson Architects

n Sustainability, MEP Consultant Hilson Moran

n Landscape Design Consultant Cracknell

n Structure Engineer Shepherd Gilmour

“Cranleigh is uniquely positioned to take advantage of these cultural and leisure high spots of Abu Dhabi”

In addition, three libraries will also be built for the school. An apartment block will be constructed alongside the school, which will house the staff members. It appears that the school is set to deliver on its motto, ‘Ex Cultu Robur’ or ‘Out of Culture Comes Strength’. In the cultured surroundings of Saadiyat Island, Cranleigh looks to provide new generations with an education that will not only allow them to develop academically, but also succeed as individuals in their own right. n

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commenced, with the first piles being laid. Awarded to NSCC International Limited – Abu Dhabi, work on the school’s piling and early construction began in July. A specialised contractor in foundation engineering and marine works, NSCC will lay 800 piles as part of the first development phase. Once the site building of Cranleigh Abu Dhabi is completed, it will contain 1,818 piles, in addition to a total of 2,129 tonnes of steel reinforcement. The fourth quarter of this year will see the construction of the school’s superstructure, supported by a 320 tonne structural steelwork frame. The school was designed by Godwin Austen Johnson Architects, a UK-based award-winning architectural firm. Furthermore, it will also offer flexible boarding opportunities in future phases – a first for Abu Dhabi. Mohammed AL Junaibi, development officer at TDIC, tells Big Project ME that as many as 280 construction workers will be working on the piling works alone. This figure may increase as construction work continues on the project, which will have a total built up area of 41,508sqm. He adds that TDIC have mandated that the project be constructed in a sustainable and environmentally friendly manner, in line with the Abu Dhabi government’s new regulations for green building. “TDIC is committed to applying sustainable elements in all areas of design on Saadiyat to continually improve the environmental, economic and social performance of the development,” Al Junaibi says. “The Cranleigh School design will achieve a TWO Pearl Design rating under the Estidama Pearl Building Rating System (PBRS). The sustainable design elements encompass water and energy efficiency, indoor environmental quality, outdoor comfort, ecological enhancement and protection, and use of materials and waste management,” he explains. In addition, the project’s concept design has been developed carefully to provide a safe and healthy environment for pupils, TDIC says. Al Junaibi explains that the development adopts the Integrated Development Process as a way of attaining

MARKET ANALYSIS

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growth market Oman is set to be a major growth market for tourism, real estate and construction.

AUGUST 2013

bigprojectME.com

MARKET ANALYSIS

Sultanate of

Growth

Big Project ME asks real estate and construction experts for their views on the often overlooked Sultanate of Oman market. Gavin Davids reports

“Tourism has clearly been one of the principal focuses for each and every market. Oman generally has some pretty good credentials in that respect”

the fast-growing markets of Saudi Arabia, Qatar and the UAE. All the while Oman has faded into the background, even being overshadowed even by the likes of Kuwait and Bahrain. However, that could be about to change, as the news that the Sultanate’s government has been instigating a number of projects that could soon see the country emerge as one of the most attractive development markets in the region. “Every regional country is trying, in some respect, to diversify away from hydrocarbon reliance,” explains Matt Green, head of research at CB Richard Ellis. “Tourism has clearly been one of the principal focuses for each and every market. Oman generally has some pretty good credentials in that respect. They have some stunning coastline, a lot of which is underdeveloped. So I think they have some real tourism credentials and they’re now starting to explore how to develop them,” he adds. Deepak Jain, head of Strategic Consulting – MENA at Jones Lang LaSalle, agrees that there’s a lot of potential in the Omani market, and tells Big Project ME that he sees the country’s hospitality market poised for growth, but warns that it requires broader tourism and infrastructure policies to be implemented

AUGUST 2013

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ver since Dubai sparked off the construction boom in the late 1990s and early 2000s, it’s become something of a cliché to refer to the region’s hyper-inflated construction boom as the ‘normal’ for the region. Oman, on the other hand, has always more closely resembled the pace of development and construction in the wider, normal world. That things move at a different pace in the Sultanate has always been something of an accepted fact by the regional construction industry. For long, the common consensus has been that the construction market in the country has been somewhat lacklustre, with no major projects happening and the pace of development being relatively sedate. It’s not surprise then that the major players in the construction and real estate market have focused their attention on

MARKET ANALYSIS

bigprojectME.com

“Hotels and the hospitality market in general are a big component of the diversification strategy in Oman”

oman project market n $65 billion Value of projects to be awarded between 2013 and 2017

n $15 billion Value of BP’s Khazzan tight gas project

n $10 billion Value

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of refinery and petrochemical complex at Duqm

AUGUST 2013

before anything significant happens. “(However) it’s certainly been a far slower moving market than we’ve seen in the UAE (for example), and I think they’re actually relying quite a lot on the new airport to fill this growth,” Green warns further. “I don’t think, at the moment, they have the infrastructure to be able to accommodate too much more (tourism traffic). They still need to get the system set up, they still need the airport as a driver to be able to actually expand and get demand from new markets. There’s quite a lot relying on the infrastructure before they can actually ready themselves to be able to expand further and faster,” he points out to Big Project ME during a telephone interview. A report by HSBC Global Research, entitled “Macro Middle East Economics Q2 2013” backs up this view. According to the report’s authors, Simon Williams and Elizabeth Martins, Oman remains one of the stronger growth markets in the region, driven by fiscal and monetary stimulus, but that growth remains heavily dependent on the public sector.

Oman does business The chart below shows how Oman ranks globally when it comes to doing business.

“The 2013 budget announced in January, meanwhile, sees a 29% increase in overall spending (on 2012 budgeted levels). Capital spending is also slated to rise 15%, and there are some signs that the infrastructure sector should gain momentum in 2013. MEED reports that projects planned and in the pipeline now stand at around $125bn (140% of GDP, and a rise of around 25% since October 2012). “Oman has also launched tenders for the first phase of the national railway in March, as well as for the planned Masirah causeway. As well as the motive to take these measures, Oman also has the means. Its fiscal surplus in 2012 came in at just over OR3.2bn (10% of GDP), the highest ever recorded in absolute terms,” the HSBC researchers say in their report. Matt Green adds that infrastructure is likely to play a massive part in the development of Oman over the coming few years. He says that projects like the new Muscat International Airport and Salalah Port are just one part of the Sultante’s increased focus on infrastructure development. “There’s a lot of road infrastructure also being built as well. These are fundamental. Hotel and the hospitality market in general are a big component of the diversification strategy in Oman,” he explains to Big Project ME. Deepak Jain adds that there are a number of drivers of growth that are pushing this sudden surge in infrastructure development. “The drivers of growth are a combination of demographic factors (population growth) and economic growth leading to increased commercial activity,” he says. “There is also a government push to promote economic growth, which will expectedly lead to increased real estate demand.” This increased real estate demand has further implications for the Omani construction market, he says, terming the current phase a ‘transition’. “The (Omani) real estate market is going through a transition, with opportunities in residential sector growth for quality products at good value. The commercial sector is fragmented and in a nascent state. There is a flight to quality and consolidation in new commercial

MARKET ANALYSIS

Economy ranking The chart shows how Oman ranks in comparison to its neighbours.

shortly, as the Sultanate strives to meet growing demand from within the country. Retail is a sector we’re going to see a lot of growth in over the next five years, says Green. “We’ve seen the recent completion of the Talal complex, which was in March of last year. They’re also looking at a massive expansion of two malls here, the Majid Al Futtaim malls, the Muscat City Centre and the Khurram City Centre,” he says. “So there’s definitely going to be expansion, in tandem, I think, with the growth of the hospitality market. We’re going to see considerable growth in retail. I think, fundamentally, everything is linked to the development of Oman’s infrastructure and they’re readying themselves to be able to expand properly. So that’s where we expect to see growth from now on.” n

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areas expected over time as high quality developments are introduced into the market. The hospitality market is also poised for growth, but it requires broader tourism and infrastructure policies to be implemented,” Jain explains. “I think we’re really at the start of everything,” adds Matt Green. “We’re going to see the pace of construction pick up. We’re seeing quite a few residential projects launch and we’re seeing a lot of hotel projects being launched as well. The other sectors, the office market, there’s not going to be much movement there.” “There isn’t a particularly strong demand other than from government entities and some of the state run companies. Outside of that, there’s not much corporate interest from non-Omani companies,” he adds. “We may start to see that change over the coming years, given that there’s going to be new infrastructure contracts awarded and an increase in overall development activities, which obviously will have a knock on impact on other industry sectors. I think that’s something we can expect to see over the next couple of years, but for now, certainly, the commercial office market is pretty downtrodden.” However, one sector that will see definite improvement in a relatively short period of time is the retail sector, says Green. He explains that a number of retail projects are underway or will be underway

SPECIAL FEATURE BIM

bigprojectME.com

BIM connections BIM technology can help the collaborative process from conception to completion of a project

MIDDLE EAST

ver the last few years, there has been a significant change in the way Building Information Modelling (BIM) is viewed in the construction industry in the GCC region. While the technology was initially treated with some suspicion by consultants and contractors in the Middle East, a succession of positive project outcomes has helped convince the construction industry that BIM should be the way forward in the future. These optimistic vibes have been further reinforced by the support of governments across the region for BIM. Countries like Jordan, Qatar and Saudi Arabia have all espoused support for projects that use the software, after having seen the benefits that come from implementing it on their construction projects. However, while it is undeniably heartening to see

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the adoption of BIM technology in the region, given the long struggle fought by its advocates, the next stage in the natural evolutionary process must start to take place, experts have told Big Project ME. This means that the case for BIM to be used across all facets of the construction process must be considered, says Dr Ozan Koseoglu, BIM leader at TAV Construction. “Even if you have a complete BIM model that was generated at the design phase, you still have lots of challenges on site,” he says. “The key issue is to bring

people together. Forget the technology, it’s about the people and the processes. These are the key things which I think are very important to look at.” “These two things are not easy to change. It really needs a different approach to change the people and the processes. You can draw the process maps and the flowcharts, but at the end of the day, the magic of BIM lies in how you bring people together within a virtual collaborative working environment,” Koseoglu adds. One way that this could be done is by

“The magic of BIM technology lies in how you bring people together within a virtual collaborative working environment”

SPECIAL FEATURE BIM

“Forget the technology, it’s about the people and the processes. These are the key things.”

BIM Experts: n Dr Ozan Koseolgu BIM leader at TAV Construction

n Phil Auguste

Head of Business Development for Causeway

n Tracy Douglas

Senior industry marketing manager at Autodesk

n Jacqueline Walpole Business analyst for FSI FM

Growing trend Construction professionals are realising that BIM can push integration and improve design.

be learned from the manufacturing industry, which has long used concurrent engineering practices, coupled with digital product prototypes, to control product outcomes. “At companies like Boeing and Toyota, product teams comprised of the various disciplines collaborate – from the outset – on all facets of a product’s lifecycle to ensure that the emerging product design includes the desired characteristics that are needed to bring a product to market,” she explains. “Their product development processes rely upon information-rich digital models that are used for product design, as well as manufacturing, field support and so on.” Therefore, integrated project delivery, enabled by BIM, can be based on a similar strategy, Douglas says. With crossfunctional project teams collaborating on a building’s design, construction and lifecycle management for optimised owned outcomes is possible, using collaborative, model-based technology as a platform. Koseoglu adds that contractors should be running a BIM model before they even go onsite, thereby allowing themselves to be best prepared for any issues that may crop up, which they always will. “What (benefits) will it bring a contractor? It will definitely reduce the cost because you oversee the issues before going onsite. Once you go onsite, you face a lot of issues, particularly in design, while the biggest issues tend to be client requests, design issues and build up issues. So by using BIM forecasts, you can oversee all of these issues before even going onsite,” he explains. “In terms of cost-wise issues, the major reason why projects are not successful are because of cost and time overruns. These are the key things: cost, time and quality. Once you lose cost and time, then you’re going to be compromised for quality as well, as many projects are,” he points out.

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having the governments take a leading role in encouraging BIM to be used, not just at the design and planning stage, but also throughout the construction process and even afterwards, during the maintenance phase. Phil Auguste, head of Business Development for Causeway, cites Singapore as an example of how this can work. “Singapore is quite advanced and through the Building Contractors Association (BCA), have made funding available for any one that’s working in the public sector (construction). 50% of their expenditure on BIM software could be reclaimed under a government grant, so they’re putting a lot of weight behind it,” he explains. “Now the UK is following suit, what they’re saying is that anyone working on government projects by 2016, needs to be combined with level II BIM.” “In very simple terms, it’s the ability to unlock the key data caught in disparate systems, for whatever process you’re managing. That could be a consultant producing a cost plan, or a contractor producing a detailed estimate,” he adds. Internationally, this is a growing trend in the construction industry, where professionals have realised that BIM can push integration and improve design outcomes. Tracy Douglas, a senior industry marketing manager at Autodesk, tells Big Project ME that a lesson could

SPECIAL FEATURE BIM

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Dr Ozan Koseoglu

Phil Auguste

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“If you have proper BIM implementation, building it digitally, and applying it to the lifecycle, then you can control the cost overruns and at least you can see where they (cost overruns) are going to be, before even building,” he adds. Tracy Douglas adds that contractors and consultants can contribute construction knowledge to existing design models by having the same model generate the information necessary to provide to all project participants. “This concept is the premise behind the AIA Integrated Project Delivery system, with all participants actively involved from the very beginning to the very end and evolving/sharing the same model along the way,” she says. “The model itself can be depicted to any level of detail imaginable and is, therefore, the single source for the design document and the shop drawing level of detail. This detail completely eliminates the cost and time associated with an iterative shop drawing process and, yet, it improves the accuracy of the translation.” Phil Auguste points out that accuracy when designing and planning is a fundamental requirement for anyone on a project. As such, he advocates that BIM be used to ensure that all facets of estimation and planning are spot on.

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“I think by unlocking the data within BIM – and making the systems used interoperable, you can get more accuracy on price, timeline; in-fact you can use BIM to drive pretty much everything. From the source data within the model, you can then effectively manage the whole process, from start to finish. From feasibility, from the first time you think of a project, through design, cost planning, estimation, build to handover, to lifecycle management, retaining and using that data from start to finish,” he asserts. Furthermore, while it’s understandable that BIM can be used for the design, planning and construction stage of the project, what’s often ignored, or simply not known, is how the software and technology can have a positive impact on the lifecycle of the building. Jacqueline Walpole, business analyst for FSI FM, a UK-based FM firm, tells Big Project ME that there’s a very

cost elmination BIM can help eliminate the cost of iterative shop drawing processes.

“If you have proper BIM implementation, building it digitally, and applying it to the lifecycle, then you can control the cost overruns”

SPECIAL FEATURE BIM

obvious impact during the design and construction phrase, but that if people consider the ‘RIBA Plan of Work’, the final phase of any project are the occupation and operation. “BIM can allow predictability of the maintenance, equipment lifecycle,

sustainability and energy costs, and therefore the ability to make appropriate design and installation decisions about the whole life cost,” she explains. Walpole says that there are benefits of having a building up and running with all FM systems in place prior to handover. “The whole concept of a ‘soft landing’ is relatively new and is being fully supported by companies such as FSI with the integration of our Concept Evolution IWMS/CAFM software to BIM databases,” she says. “We can provide consultancy on ensuring that FM is considered at an early stage and help in developing your BIM protocol and BIM EIR (Employer Information Requirements) to make sure a clear specification of what data is stored and how it is attached in the BIM is of use for the operational phase of the building. “During the operation, if the BIM, it can provide an electronic O&M manual for all to view and make re-tendering of maintenance contracts, space management and refurbishment far simpler.” The onus is now on the construction industry in the region to seek out ways to challenge and adapt the technology to best suit their own needs. It’s certainly proved to be up to the task. n

Paul Wallett, area business director, Tekla Middle East, says contractors should use BIM so that they can more easily enjoy the benefits of coordinated, rich data and use that information into their processes so that they can reliably deliver their projects faster and more economically. He explains: • Contractors can better coordinate disciplines, resolve conflicts and plan projects before construction begins. • Improve collaboration between project participants and thus make early stage design decisions easier. • Create accurate material quantification of detailed design data for better cost estimation. • Benefit from virtual construction process: 4D simulation and clash detection. • Model cast in place reinforced concrete from design to execution. • Linked GPS jobsite layout verification or setting based on the model. Especially concrete, formwork, and steel embeds • Jobsite layout of equipment. Making drawing deliverables of that plan. • Post construction FM can be done with the information rich model.

The fully scalable software solution for asset, facilities, maintenance and property management. Single building, single service, multiple buildings, multiple services, international property portfolio? Cloud hosted or in-house deployed, FSI has a Concept™ edition to suit you.

Software for facilities, property and maintenance management Understanding your requirements T: +971 (0)4 449 5380

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E: info@fsime.ae W: www.fsime.ae

SPECIAL FEATURE Cost Control and BIM

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Controlling Costs with BIM

Big Project ME talks to Ian Hauptfleisch, general manager of CCS Gulf about how cost control software and BIM can work together to benefit contractors and consultants working onsite

uilding Information Modelling has many uses in the construction industry. It can be used for planning and designing a project, and it can be used as an estimating tool to calculate the workforce needed on site, or the amount of materials needed. It can also be used as by FM providers to help maintain and length a building’s lifecycle.

However, the software has another use that isn’t often considered by consultants and contractors as they plan out their projects, a somewhat surprising omission given their desire to keep costs at a minimum and control expenditure onsite. There are a number of ways that BIM can increase the ability to control costs on a project, both indirect and

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“BIM and 3D models can provide Candy users with quantities easily and quickly as well as reduce changes to the budget further down the line”

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direct. They range from automatically and dynamically generating material and equipment take-offs, to better visualisation and understanding of the scope of construction. All these different methods result in construction industry professionals being able to put together more accurate cost estimations and tracking processes. Ian Hauptfleisch, general manager of CCS Gulf, the Dubai-based branch of the South African construction software solutions provider. With extensive experience in providing regional construction companies with the tools to accurately estimate the financial and logistical figures associated with their project, he’s ideally placed to judge how

SPECIAL FEATURE Cost Control and BIM

“The accuracy of the budget depends on both rate build ups and the quantities so obviously the better both are, the more accurate the estimate or budget will be”

Cost control and BIM combined n Accuracy BIM helps provide accurate budget and cost estimates for contractors

n Visualisation BIM

allows contractors to predict where their expenses occur

n Understanding BIM

allows contractors to understand where their costs are coming from

ian hauptfleisch CCS Gulf ’s GM says BIM can help save on costs and increase estimate accuracy.

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effective combining BIM and cost control software would be. “The foundation for control on a project stems from a resource based, analytically accurate estimate or budget that Candy can produce and BuildSmart buys against,” he explains to Big Project ME. “The accuracy of the budget depends on both rate build ups and the quantities so obviously the better both are, the more accurate the estimate or budget will be – which is essential as most contracts are issued on a lump sum basis.” “BIM and 3D models can provide Candy users with quantities easily and quickly as well as reduce changes to the budget further down the line as a result of variations with the ‘virtual build-ability’ that BIM offers. Just like anything ‘design precedes product’ and the better the design and design information (at the right time) the better the holistic product deliverable,” Hauptfleisch adds. Some of the ways BIM can help with cost control include: accurate quantity take-off, better visualisation and understanding, which in turn leads to more accurate costs and streamlined or optimised processes. Furthermore, with BIM, the model itself can be depicted to a level of detail that was previously unimaginable, making it the single source for the design document and the shop drawing level of detail. This level of detail not only completely eliminates the cost and time associated with an iterative shop drawing process, but also manages to improve the accuracy of the translation. In turn, this insight and knowledge could lead contractors to significant savings, says Hauptfleisch. “Most of the savings from BIM (80% if I’m not mistaken) are in design.

However, on site, from the estimate calculated in Candy using quantitative and locational information from BIM or a 3D model, expenses are made according to and against the allowable or budget in BuildSmart, limiting over orders on value, quantity and waste,” he clarifies during the interview. As the technology continues to evolve, cost control software providers will have to be able to continuously look at different ways in which BIM could be applied to the challenges they face from their own software, says Hauptfleisch. “With the advent of 4D and 5D, not only can quantities be managed but also time and the locational/functional element of cost, i.e. costs can be tracked against quantity, location and activity.” “One of the challenges on a site is knowing why something (a loss and/or gain) happened – and to find out why you have to know where, when, with and who incurred that cost,” he points out. It’s clear that BIM isn’t just a mere modelling tool, and it appears that the industry is sitting up and taking notice of that fact. As the information it provides to users could have a significant impact on the way the technology is viewed in the region, it will prove to be only a matter of time before we BIM becoming an industry wide standard, especially since it has the potential to save its clients millions. n

TIME & MONEY iTECH

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Helping you make the smartest decisions

Virtual Managers Big Project ME speaks to iTech’s Marc Durand about how his company can help firms save significant amounts of time and money on their projects by using their BIM methods to forecast problems and reduce wastage of resources

ormed in 2011, iTech is a relatively new entrant into the BIM construction market, but has already begun making waves thanks to its approach towards using existing BIM technology as a total control system, rather than just a design tool. Set up by Jeffery Freund, an architect, and Marc Durand, a structural engineer, the consultancy offers clients virtual project controls that use BIM to deliver project management, coordination and savings on a project. How does iTech work on a project with a client?

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Marc Durand At iTech, we don’t create any BIM software. We use Autodesk solutions with Revit, we use MicroStation solutions with EcoSim or other platforms. Basically, we use what the client uses, but we come in with a process and the knowhow to utilise these tools properly, and be able to use them with a good

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pipeline to exchange information within the design application. iTech has grown up a lot on the interoperability between the different resellers. When we work on Revit, we’re capable of adding a pipeline to export it to a MicroStation environment, and that allows us to not to limit our clients who use a specific software, but to really utilise the technology. We make sure the pipeline is organised and streamlined and we explain to them the limitations they face if they utilise one software compared to another. But ultimately, the goal is not to be a software retailer. We do not sell software, we use it only by manner of making people feel comfortable that we’re there to advise them and coach them, rather than to force them to utilise a technology that they may not use after the project. How does that translate to working on a project?

TIME & MONEY ITECH

How can iTech’s methods be implemented on site?

MD We work on really big scale projects, and what we’re doing is supporting the main contractor and working with subcontractors. Our job is to really monitor the BIM implementation process. We help to manage all the data, the quantities, the quality of the drawings; all to ensure that they’re properly done and to make sure that there’s a consistent approach with the design software and output.

“Our job is to really monitor the BIM implementation process. We help to manage all the data, manage all the quantities, manage the quality of the drawings”

How much can using iTech’s methods help a client?

MD It’s difficult to forecast analysis on existing projects, but I would say that we could save a good 20% to 25% on manpower reduction. On paper, we could achieve a 35% cut in manpower reduction. The second thing is that you have no worries about the time saving we generate by analysing a clash before it happens on site. We are forecasting and predicting problems before they happen to minimise the loss of money, and this becomes really interesting on the client’s side. BIM is really about money saving for the client and it’s an extremely good time saving tool for the contractor. It is also a fantastic tool for design because it allows you to coordinate all your drawings.One of the things we’d like to emphasise is that savings go beyond only man power. When you look at a site, it could take 300 workers to make your shop drawings (come to life), but if you reduce that by 20%, you also reduce accompanying office space, human resources, software and so on. These are not small costs when you think about it. Overall, you can make some serious savings.

iTech solutions n Coordination Work

with contractors and consultants to bring projects together

n Management Firm

manages all the data and plans for the project

n Savings Use BIM

to save money for their clients through accurate estimations and analysis

How does your approach differ to each project you do?

MD Every BIM product, to be honest, is pretty much the same. The only difference is the complexity of the geometry, which will emphasise on the complexity of the model itself, but the processes are the same. If I build a villa or a complex project, the approach is going to be the same, just the resources would be different. So we really just develop the entire pipeline and then when the client comes on board to learn from it, we pass on what we’ve learnt. n

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MD The type of projects we’ve been delivering over the last few years, they go in every direction. We’ve worked on the Al Ain Stadium, where we had to do the MEP with the main designer, and Al Mafraq Hospital, where with worked with the main contractors and were doing pretty much every discipline. We’re there to not only generate shop drawings out of the coordinated virtual prototype, but to also generate BOQs, we’re also generating coordination meetings, we’re analysing all clashes with subcontractors, we’re turning into virtual project managers, if you wish to call it that. We’re not a 3D production office, of course we do some production because the client may not know how to do itself himself, but the majority of our people, they are all engineers and architects, and we utilise them more for project management, coordination and bringing good advice to our clients.

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Al Garawi Group an authorized distributor of the following licensee for Saudi Arabia, U.A.E., Bahrain, Qatar, Oman, Jordan, Lebanon, Kuwait and Yemen. Wolverine World Wide, the global footwear licensee for Caterpillar Inc.

Medco

P.O. Box: 17301, JebelP.O. Ali, Box: Dubai,17301, U.A.E.,Jebel Tel.: +971 Ali, Dubai, 4 881U.A.E., 8821 Fax: Tel.:+971 +971448818944, 881 8821 Fax: +971 4 8818944, Showroom: Al KwakebShowroom: Building, (B-Block) Al Kwakeb Sheikh Building, Zayed (B-Block) Road, P.O. Sheikh Box: 2904, Zayed Dubai, Road, U.A.E P.O. Box: 2904, Dubai, U.A.E Tel.: +971 4 343 7400 Tel.: / 343 +971 75004 Fax: 343 +971 7400 /4343 3437600, 7500 Fax: email:medcodxb@emirates.net.ae +971 4 3437600, email:medcodxb@emirates.net.ae

CPD modules

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Early Contractor Involvement in Tendering Procedures Brian Greenhalgh, Oman Centre chair of the Chartered Institute of Building, writes this CPD module about early contractor involvement in construction projects

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arly contractor involvement (ECI) is about engaging the contractor during the early stages of a project to contribute to the design development and hopefully to promote a better understanding of the risks and responsibilities taken on by all of the parties to a project. It is not a tendering procedure or procurement route itself, but is an all-encompassing term for those procurement routes which require the contractor to be appointed at an early stage in the project when their technical and management skills can make a significant and beneficial contribution to the design development. In contrast to the traditional procurement route where the contractor

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is appointed after the design has been completed and therefore only involved in the project during the construction stage, ECI involves the contractor working with the client and design consultants in the initial stages of the project to develop the design and a detailed project plan. In order to get an indication of the construction costs and therefore, how much the contractor will be paid for the works, the parties will also develop an outline price for the project, which is effectively an approximate estimate of the construction costs. Although similar to a design-build arrangement, ECI has the added benefit that the outline price is not fully agreed until all the risks can be properly assessed and allocated to the parties. The outline price will normally

CPD modules

• Quicker decision making. • Better integration of construction methods, by using the contractor’s technical and programming and scheduling skills. • Earlier procurement of materials, which is particularly important for items which require long lead times. • Fewer variations during construction, as the design is more likely to be robust, practical and efficient. • Fewer defects during the lifecycle of the building as the contractor can identify and eliminate weaknesses in the design which can lead to weaknesses in the structure and fabric of the works.

early involvement ECI can help speed up the development of a project.

be converted to a lump sum fixed price before construction starts in earnest. Advantages of ECI The tendering process for ECI projects is likely to be less intensive and less costly for the client, for which they will no doubt be pleased. It is aimed at selecting the best team to deliver a project and consequently does not require the tendering contractors to prepare detailed lump sum quotations for the actual construction stage of the works.

ECI advantages n Delivery time Concurrent working results in shortened delivery time

n Team approach

Other advantages include: • A shortened delivery time, through concurrent working, as construction may commence while the design is developing. • A team approach, as the builder is part of the initial project team and not seen as an adversary (which can be the case). • The contractor’s skills and experience is harnessed early in the project. • Increased opportunity for innovation and buildability.

So, involvement of the contractor early in the project, when the design is being developed has many advantages and some disadvantages, (which is discussed below). From an estimating point of view, the initial cost estimates will be a mixture of ‘top-down’ techniques taken from historical cost data and ‘bottom-up’ techniques using primary resource costs. This is because the cost estimates will be mainly generated by the contractor, who has historically used project scheduling techniques and resource costs to build up their estimates and tenders. In terms of how the contractor is appointed on ECI contracts, this would normally be through a two-stage process, possibly requiring two separate contracts (hence the standard description of ‘two stage tendering). The first stage, which is effectively a consultancy contract, preferably through an NEC Professional Services Contract (PSC) or through a bespoke Pre-Construction Services Agreement (PCSA), either of which would be used to appoint a suitable contractor who is selected through a tender process based on quality and price, to arrive at the Most Economically Advantageous Tender or MEAT.

Builder is part of the initial project team

n Opportunity Increased opportunity for innovation and buildability

n Quicker decision

“ECI involves the contractor working with the client and design consultants in the initial stages of the project to develop the design and a detailed project plan”

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making

CPD modules

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“From an estimating point of view, the initial cost estimates will be a mixture of ‘top-down’ techniques taken from historical cost data and ‘bottom-up’ techniques using primary resource costs”

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Individual prices for labour, plant, overheads and profit would all be required for the evaluation of this initial part of the tender process. These prices, along with material costs, would also be incorporated into the second stage after the design is completed, to calculate the fixed price construction costs, which are often set out as a ‘target price’ with penalties or bonuses (known as painshare and gainshare). Under the first stage PSC contract, the contractor is obliged to provide input into the design process, instigate procurement of work package contractors and address the various risks inherent in the contract in order to work towards either a lump sum or a target price for the second stage, the construction phase. If a lump sum or a target price is reached which is acceptable to both the

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contractor and the employer, then the contractor is appointed under a Target contract, to construct the scheme. Should an acceptable target not be agreed, or sufficient funding is not available at the time, the Employer should ensure that there is a clause which enables the termination of the overall contract with no financial effect to the employer.

eci disadvantages n Too many participants

n Additional costs n Possible need for independent cost

Disadvantages of ECI The difficulties which may be encountered with some ECI projects are varied, they may include: • A heavy involvement of senior staff from all participants in the early stages of the project for longer periods. • Additional costs through assessing design alternatives and value engineering workshops throughout the design development stage. • The possible need for independent cost estimators to prevent inflated prices resulting from the non-competitive building up of the construction costs. It is generally accepted in the industry that the advantages of ECI far outweigh the disadvantages, although contractors have expressed concern that ECI contracting ties up their senior staff for much longer than under more traditional forms of procurement – staff who should be on site earning turnover, thereby contributing to recovery of head office overheads. This additional involvement occurs particularly in the early stages of the design phase when (under usual ECI forms) contractors are often reimbursed at hourly rates over an extended period. But this work has relatively low profit margins and contractors traditionally make their main profit by taking on the risks in construction. It is probably too early to tell whether in the long run this issue will outweigh the benefits of enhanced employer relationships, which ECI is designed to deliver and hopefully these benefits will make up for the intensive up-front managerial staff involvement. A further disadvantage is that ECI limits the opportunity for competition on price, since fixing a competitive lump sum price so early on in the project is clearly not possible.

estimators

CPD modules

This risk can be limited by deferring the formal appointment until the contractor can guarantee a maximum price. The early selection of a contractor therefore carries one very significant caveat – that the process must be even more transparent than when the contractor is selected at a later stage in competition with others. Competition and anti-trust legislation in many countries usually requires that all prospective contractors have equal opportunities in tendering. When the selection is done on price alone, the process is inherently transparent; when selected on other criteria, such as value, the decision process has to be deliberately made as transparent and unbiased as possible. Therefore, early involvement of the contractor means that the project is no longer in competition and, as a result, despite the employer and their consultants trying to control the procurement process, they may find that anticipated project costs rise throughout the pre-construction period. In general, the employer’s commercial bargaining position will be progressively weakened the longer the contractor is involved without a formal building contract being agreed and signed.

Once a contractor becomes integrated as part of the project team and has carried out extensive pre-construction services, the employer may be reluctant to dismiss them in the event of failure to perform or a refusal to negotiate sensibly on price and programme. Whilst the preconstruction agreement may be drafted to allow the employer to terminate the contractor’s employment, it is important that employers realise that if they allow the contractor to go too far into the design and/or construction programme, it may

be too late to stop or turn around. It is not uncommon, as part of the preconstruction services, for a contractor to carry out some early enabling or investigative works on site by a minicontract or letter of intent. However, it is advisable not to go beyond this stage. If the contractor is allowed to carry out more detailed or permanent works on site before agreeing the terms and conditions of the substantive building contract, then the employer’s negotiating position will be considerably weakened. n

Questions for Module 4: EARLY CONTRACTOR INVOLVEMENT IN TENDERING Provide answers below:

n “This module will contribute 30 NAME (capitals)

minutes(general) towards your CPD

1. What do you understand by the term

JOB TITLE

obligations. If successfully completed,

‘Early Contractor Involvement’?

COMPANY NAME

certificates will be distributed two weeks after

Ans:

ADDRESS

the module closes.

P.O.Box: 2. List the main benefits to a client of early

MOBILE:

n Email carlo@cpimediagroup.com

contractor involvement.

FACSIMILE:

if you have any questions about our CPD

Ans:

EMAIL:

programme.

Corporate Publishing International

has been sufficiently completed.

n Information you supply to CPI may be used

P.O. Box 13700, Dubai, UAE

Ans:

for publication and also to provide you with

Tel: +971 4 440 9100

information about our products or services

Fax: +971 4 447 2409

4. Discuss the various financial risks to

in the form of direct marketing by email,

Web: cpidubai.com

both the client and contractor of a cost

telephone, fax or post. Information may also

reimbursable arrangement.

be made available to third parties.

fixed price for a contract before the design

n You can also contact us on:

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3. Outline the difficulties of establishing a

COMMENT SCHRÉDER

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Wouter Vanhoudt

LED Shines Bright Wouter Vanhoudt, general manager of Schréder Gulf, talks to Big Project ME about how Abu Dhabi’s progressive attitude to LED changing the way the GCC regards lighting technology

E Schréder Gulf in numbers n 1927 Established in Belgium

n 1951 Expanded into France

n 1969 Opened first office in Lebanon

n 1973 Jeddah street lighting project

n 2007 Schréder Gulf

opens in Abu Dhabi

ver since the Schréder Group first established its presence in the Middle East in 1969, with an office in Lebanon, the Belgium company has been involved in a number of major lighting projects in the region. These include the luminaires for the first street lighting installation in Jeddah in 1973, most of the lighting for the Holy City of Mecca, including more than 150,000 luminaires on walkways, and the lighting for most of the highways in Qatar, including Salwa, Doha Expressway and the North Road. Over the last 10 years, Schréder began dealing with LED lighting technology as it looked for alternative lighting sources that would consume less energy and prove to be more efficient in the long term. As such, by 2007, the company had started working with high powered LED lighting and successfully completed projects in Split, Croatia and Porto Susa Train Station, in Torino, Italy. Having established the credibility of the lighting technology in Europe, the company decided to focus its attention on brining LEDs to the Middle East and GCC

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“We can see that Abu Dhabi is at the forefront of LED technology, as they’ve been the first ones to make the radical choice of LED for everything, except highways”

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region. Here, as Wouter Vanhoudt, general manager at Schréder Gulf, explains, they found a region, that was underdeveloped in terms of actually using the technology, was more than willing to learn more about it and adopt it. “What we see is that Abu Dhabi has been taking the forefront (in LED lighting),” Vanhoudt says. “I think there’s been a vision from the executive council to move ahead with LED, to be able to work on the saving of power, the saving of energy and to make better use of the oil and gas than they have in the past,” he explains to Big Project ME at the Schréder Gulf offices in Dubai. “They realise that 20% of the world’s electricity is consumed by the world’s lighting, both outdoor and indoor. We can clearly see that Abu Dhabi is at the forefront of LED technology, as they’ve been the first ones to make the radical choice of LED for everything except the highways, at the moment. There’s been a Royal Decree passed on this, and we can really call this visionary,” Vanhoudt asserts. As a result of this initiative by the UAE capital, Qatar and Saudi Arabia are beginning to follow suit and are using Abu Dhabi as a guideline towards adopting their own standards and regulations when it comes to LED technology. “What we also see currently is that Qatar is also starting to do this as well. The first solar powered LED solutions have been implemented by Ashghal. There’s another project there as well, which will be a big LED installation of more than 1,500

COMMENT SCHRÉDER

Wouter Vanhoudt’s main DO’s for commercial, outdoor lighting Consider the thermal behaviour of the region, this is the biggest one. For me, it’s two steps: First of all, check with the manufacturer if a particular fitting or product is fit to be installed in this region. Not all of the European or American products will survive in this heat. The manufacturer should be able to tell you whether it’s a good fitting to be introduced, yes or no. Secondly, and this is very important as well, don’t talk about power in itself. Power is the combination of the number of LEDs and driving current. This is incredibly important. A lot of people are asking for 250W fixtures, I can achieve that 250W by a lot of LEDs and a low driving current, or with less LEDs and a high driving current. The cost price will change a lot. The less LEDs, the less initial investment. The other thing is to follow up as much as possible into the literature, into what is the new technology coming, what are the new standards coming out. Please

lighting of their structures. “The only thing that you need to consider in this region, and it’s not even part of the European standards, its heat. This is one of the biggest do’s for people. They need to look at thermal behaviour, with driving current of an LED, to determine what is going to be the life time and the maintenance factor of an LED luminaire,” he explains. n

don’t follow the brochures, if you want to investigate the products. Go and have a look at test reports and websites. Technology is changing so fast, that brochures aren’t able to keep up to speed with the technology, you really need to be able to look into detail, which are test reports that contain the right data.

Schréder Gulf can be reached on: Abu Dhabi office: Industrial Zone Mussaffah P.O.Box: 110399, Abu Dhabi Ph: +971 2 554 44 48 Emai: info@schredergulf.ae Dubai office: Fraser Suites Building, PO Box: 283410, Dubai Ph: +971 4 4380633

TuNNEL VISION Schréder Gulf has worked on several highway lighting projects in the region.

AUGUST 2013

MIDDLE EAST

pieces on Route 66. It is street lighting in areas similar to Dubai Marina,” he says, to illustrate his point. “Saudi Arabia is picking up as well. There’s been a clear message from King Abdullah that the country needs to reduce its power consumption. At the current rate of development, by 2022, the Kingdom will need to be an importer of oil. You can see that they are massively investing in infrastructure and industry and they’re consuming more and more energy.” “All the projects that we currently see in KSA are currently on hold because they’re investigating whether they can move them over to LED technology. In Kuwait and Oman, a lot of pilots are being installed, but they are more hesitant, so in terms of the LED market, I clearly see Abu Dhabi, Qatar and Saudi Arabia as the biggest markets,” Vanhoudt asserts. With that in mind, he outlines some crucial points that he feels clients and consumers should know about before they enter into any agreements concerning the

TENDERS

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TOP TENDERS Project name: Jebel Ali Theme Entertainment Development Project

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Project name: Lillian Towers Project - Business Bay

Budget $220,000,000 Client Tameer Holdings (Dubai)

Client Meraas Development (Dubai) Region Dubai, UAE Region Dubai, UAE Description Development of five different theme parks in Jebel Ali area to promote tourism

Project name: Viceroy Resort Project - Palm Jumeirah

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Project name: Abraj Kudai Mixed-use Towers Project

Budget $1,000,000,000 Client SKAI Holdings Ltd. (Dubai)

Budget $3,500,000,000

Region Dubai, UAE

Client Ministry of Finance (Saudi Arabia)

Description Construction of Viceroy Resort

Region Riyadh, Saudi Arabia

Description Construction of Lillian Towers comprising 2 buildings, each consisting of 3 common basement levels, a ground floor and 29 additional floors offering 447 rooms and 136 serviced apartments, including a gymnasium hall, a health club, parking spaces for 984 vehicles and shopping facilities Status New Tender

Project name: Dar Wasl MixedUse Development Project

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comprising (481) rooms and (221) residences, including (10) restaurants, an 800-square-metre spa, a 350-square-metre gymnasium, a 106-metre swimming pool and a beach club

use towers comprising a total of (12) buildings ranging in height from 30-45 storeys

Status Current Project

Description Construction of Abraj Kudai mixedRegion Dubai, UAE Description Development of Dar Wasl mixed-use scheme comprising a residential block with (112) units, (166) villas and commercial area on about 6,000sqm of land, including facilities such as health club and swimming pool

Status Current Project

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AUGUST 2013

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MIDDLE EAST TENDERS SPONSORED by Tel +9714 346 6456 Web www.ccsgulf.com Email info@ccsgulf.com

UAE Commercial Tower Project - Jumeirah Lakes Towers

PProject Number MPP2787-U Territory Dubai Client Name Dubai MultiCommodities Centre (DMCC) Address Almas Tower, Jumeirah Lake Towers City Dubai Postal/Zip Code 48800 Country UAE Phone (+971-4) 424 9600 Fax (+971-4) 390 3897 Email customercare@dmcc.ae Website http://www.dmcc.ae Description Construction of a commercial tower in the Jumeirah Lakes Towers community Status New Tender Tender Categories Prestige Buildings Tender Product Commercial Build

Saadiyat Rotana Resort Project Project Number MPP743-U Territory Abu Dhabi Client Name Rotana Hotels, Suites & Resorts (Abu Dhabi) Address 7th Floor, East Wing, Abu Dhabi Mall

City Abu Dhabi Postal/Zip Code 45200 Country United Arab Emirates Phone (+971 2) 699 4444 Fax (+971-2) 699 4445 Email sales.abudhabi@rotana.com Website www.rotana.com Description Construction of 5-star Saadiyat Rotana Resort comprising (354) rooms and (13) beach villas Period 2015 Status New Tender Main Architect Gazi Awad Architects & Engineers (Abu Dhabi) Project Manager EC Harris International Limited (Abu Dhabi) Tender Categories Construction & Contracting, Hotels, Leisure & Entertainment Tender Products Hotel Construction, Villas Construction

Saudi Arabia

Provided by Tel +9712-6348495 Web www.MiddleEastTenders.com Email sales@MiddleEastTenders.com

Fax (+966-1) 225 9000 Email info@sabic.com Website www.sabic.com Description Engineering, Procurement and Construction (EPC) contract for the replacement of existing ethylene oxide reactors at four petrochemical plants Budget $260,000,000 Period 2015 Status New Tender Tender Categories Industrial & Special Projects Tender Products Chemical Plants

Suez Canal Fuel Terminal Project

Project Number ZPR1131-E Territory Egypt Client Name Port Said Port

Authority (Egypt) Address Azmy & Moustafa Kamel St City Port Said Country Egypt Phone (+20-66) 348 269 / 348 270 / 348 271 Fax (+20-66) 348 262 Website www.port-said.com Description Engineering, procurement and construction (EPC) contract to build a fuel terminal at Suez Canal Budget $435,000,000 Period 2016 Status New Tender Tender Categories Marine Engineering, Works & Seaports, Oilfields & Refineries Tender Products Crude Transportation, Storage & Distribution, Seaports, Storage

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Ethylene Oxide Reactors Replacement Project

Project Number MPP2789-SA Territory Saudi Arabia Client Name Saudi Basic Industries Corporation (SABIC) City Riyadh 11422 Postal/Zip Code 5101 Country Saudi Arabia Phone (+966-1) 225 8000/ 225 9701

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AUGUST 2013

TENDERS

Red Sea Astrarium Theme Entertainment Resort Project

Amman - Zarqa Bus Network Project

Project Number MPP2782-J Territory Jordan Client Name Government of Jordan City Amman Country Jordan Fax (+96-26) 585 7583/ 585 7639

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Qatar High-Voltage Substation Project - Mesaieed Industrial City

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Email info@qatarsteel.com.qa Website www.qatarsteel.com. qa Description Engineering, Procurement and Construction (EPC) contract to build a 220/66/33kV high-voltage substation in Mesaieed Industrial City Budget $38,000,000 Period 2014 Status Current Project Main Contractor Siemens WLL (Qatar) Tender Categories Power & Alternative Energy Tender Products Substations Construction

KUWAIT Infectious Disease Hospital Project

Project Number MPP2784-K Territory Kuwait Client Name Ministry of Health

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AUGUST 2013

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DIARY AUGUST

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HAPPENING THIS MONTH... MENA 2013 Gulf Sol 2013

Dubai, UAE August 3 – September 5, 2013 The first totally dedicated exhibition for the PV and Solar Industries of the Middle Eastern and Northern African Region

International

The Architecture and Built Environment Series of Events 2013

Singapore Convention and Exhibition Centre, Singapore July 31 – August 2, 2013 The Architecture and Built Environment (ABE) series of events is organised by Sphere Exhibits for the built environment. Under the flagship of BuildTechAsia2013, four shows integrate as one unique platform to serve the key growth sectors across various industries and address the challenging trends of urbanisation

Third National Construction Law Conference

Sydney, Australia August 2 – August 4, 2013 Convened by the Society of Construction Law Australia (SOCLA), the 3rd National Construction Law Conference takes a look at how the constant technological advances are impacting the construction industry

ISARC2013 – The 30th International Symposium on Automation and Robotics in Construction and Mining

MIDDLE EAST

Montreal, Canada August 11 – August 15, 2013 Share and learn about the most recent advances in construction and mining, information technologies,

AUGUST 2013

field instrumentation and sensors, automation in excavation and haulage, safety and environmental issues, fleet management systems, and computer-aided process design and optimisation

Innovations in Concrete Construction Technology, India 2013 Mumbai, India August 21 – August 23, 2013 Sponsored by Tekla India, the Innovations in Concrete Construction Technology India 2013 is the only premier forum of its kind exclusively dedicated to the emerging Precast and System formwork technology for your construction projects

California Construction Expo Long Beach Convention & Entertainment Centre, Long Beach, California August 22, 2013 The California Construction Expo 2013 is the Golden State’s premiere gathering for contractors, designers, construction professionals, suppliers and construction workers to learn directly from government agencies about the increasing opportunities associated with $150 billion in public work programs currently proposed or underway

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CONSTRUCTIVE CRITICISM

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GAVIN DAVIDS

A Little Education Goes a Long Way Gavin Davids says that Abu Dhabi’s investment in education could be the start of an economic shift towards a knowledge-based economy

MIDDLE EAST

Earlier this year, during CityScape 2013, the Abu Dhabi Educational Council showcased its Future Schools Program, while participating in the Eco Construct Expo Conference. What’s interesting to note is that ADEC is clearly determined to completely revamp the way its schools are envisioned, conceptualised and built. Engineer Hamad Al Dhaheri, ADEC’s PSQA executive director and Infrastructure and Facilities Division manager, said at the time that the Future Schools Program would ‘transform school facilities’ in Abu Dhabi. He highlighted the fact that all of ADEC’s Cycle 1,2,3 public schools have been granted Estidama Pearl rating three due to their eco-friendly sustainability features, as well as for their overall design and technology facilities. “Our schools serve the community around them, since they are built in the centre of a community which consists of a hospital, mosque, shops, and accommodation,” he added. So the question has to be asked, ‘what’s driving this?’ Why has education suddenly become so important to the Abu Dhabi government, that they’re determined to build 100 new schools in the capital between 2009 and 2020?

AUGUST 2013

While the official line is that the capital expects to see a sizeable surge in its population levels in that timeframe, I suspect that there may be an even larger plan at work. It’s no secret that the UAE has been seeking for ways to diversify its economy away from oil and gas for a number of years. Dubai has obviously gone down the tourism route, building extravagant projects that will bring in travellers looking to ‘shop till they drop’. On the other hand Abu Dhabi has gone for a quieter, more thoughtful approach. Quite literally. I believe that this drive to develop education at a primary and secondary level are but the first steps towards the capital reinventing itself as a knowledge based economy. Already we’ve seen some of the finest university campuses in the UAE being built, while ADEC is determined to revamp things at a school level. What’s next? I predict we could see science parks and other such ‘knowledge based’ projects cropping up, pushing the economy towards an era of innovation and development. The UAE capital could be about to prove to the region that a little education goes a long way. n

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