May 2014 by Big Project Middle East

MAY 2014

ALSO INSIDE THE QATAR CONUNDRUM GREEN FUNDING MEP LEARNS FAST KEMPINSKI – THE WAVE

A HARD ACT TO FOLLOW Bashar Abou-Mayaleh on why pre-cast is the future

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At the 2014 Construction Machinery Show we sold 70 units and 100 more units are under discussion. We have delivered a positive message to our existing clients, our competitors, and grabbed new clients. I think gaining such an appreciation from all members in the construction equipment sector is a great honour and will encourage us to work very hard to keep the same level of style, image, and standards.”

This year the CM Show team delivered an exhibition Saudi deserves. For years, we have seen a vision in this Show and this year the vision was achieved. We wanted quality traffic and we saw equipment and company owners; and we were able to offer some promotions to entice sales. I saw an increase in our sales immediately. Our principles, Doosan and Everdigm, really enjoyed themselves. We anticipate the upcoming years to be even better.”

The Construction Machinery Show was perfect from an awareness point of view. We explained Roots Group Arabia’s capability of covering the construction industry with all of its needs and requirements. The attendance was good especially during weekdays and towards the end of the exhibition. See you next year.”

Al-Qahtani & Sons Khaled El Shatoury, Managing Director

Saudi Diesel Equipment Ahmed Alkooheji, Marketing Manager

Roots Group Arabia Abdulaziz Felemban, Brand Manager

Co-located with

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

M MIDDLE EAST

CONTENTS

MAY 2014 05 THE BIG PICTURE DUBAI CREEK BIDS FOR UN HERITAGE SITE STATUS Dubai Municipality to push for landmark site to be recognised by UN

16 IN PROFILE HARD ACT TO FOLLOW Bashar Abou-Mayaleh, managing director of Hard Precast Building Solutions tells Big Project ME that the future will be precast

22 SITE VISIT: KEMPINSKI, THE WAVE – MUSCAT CATCHING THE WAVE Big Project ME takes a tour of Oman’s largest hospitality project

28 INDUSTRY FOCUS OPPORTUNITY KNOCKS Is Qatar Shell is about to open the door for local contractors?

32 MARKET FOCUS: QATAR THE QATAR CONUNDRUM How will Qatar’s population growth impact its construction market?

40 SPECIAL FEATURE: GREEN FUNDING PAYING FOR SUSTAINABILITY How can the UAE’s green economy be funded for the future?

44 SPECIAL FEATURE: GREEN CONTRACTORSVENTIVELY CAN CONTRACTORS BUILD GREEN? Big Project ME examines how contractors can contribute towards the green building aspirations of the region

48 MEP FOCUS ON A LEARNING CURVE How the MEP industry is ready to push ahead thanks to the introduction of the green building codes

60 TENDERS TOP TENDERS Big Project ME lists the region’s biggest construction tenders for May

74 EVENT REVIEW BIG 5 SAUDI CITYSCAPE ABU DHABI Big Project ME reviews the 2014 edition of Cityscape Abu Dhabi

PAGE 22

Big Project ME visits the construction site of Kempinski – The Wave in Muscat, Oman.

76 CONSTRUCTIVE CRITICISM COUNCIL-CREATED COMPLICATIONS Gavin Davids says that recent comments by Fahd Al-Hammadi may have an incredibly damaging effect for the Saudi construction industry

EDITOR’S COMMENT

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Landlords cashing in A colleague has opted to move out of their property in the JLT area of Dubai after their landlord took the opportunity to raise their rent by 30%. They sensibly opted for a PO Box and more room for less money on the city’s outskirts. There was a lot of speculation on the inflation of rents after the awarding of World Expo 2020 with many reliable observers predicting that the Expo effect was already priced into the market. This may have been an optimistic assumption. The data is still raw and reports in the media largely anecdotal but we could see a substantial hike in prices when the yearon-year figures come in November. A Gulf News report even claimed that some rents have already risen by as much as 100% in Dubai and Sharjah. There are many advantages of the tax-free haven that has been created in the UAE. It has helped create an environment where individuals and organisations can thrive unfettered by the financial restrictions in place in other areas. However there are some downsides where its absence does create problems when it comes to governments being able to encourage and stimulate change. This is particularly true when it comes to building retrofitting. Just as landlords are cashing in, the construction industry is being encouraged or asked to pursue greener ways to build. Few would argue against constructing laster longing and cheaper running buildings but what about encouraging the owners of the vast majority of properties to reduce their energy consumption? I sat in on a discussion last year on whether the government should provide incentives to aid building owners who are prepared to re-fit their properties to make them energy efficient and ironically perhaps, it got quite heated. Quite rightly it was argued that they are already in a fiscally comfortable environment. Our look at sustainability this month’s issue suggest those incentives may instead come from within the banking sector. The question of being green is one that property owners should start preparing themselves to answer.

GROUP CHAIRMAN AND FOUNDER DOMINIC DE SOUSA GROUP CEO NADEEM HOOD GROUP COO GINA O’HARA PUBLISHING DIRECTOR RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471 EDITORIAL DIRECTOR VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5472 EDITORIAL GROUP EDITOR STEPHEN WHITE stephen.white@cpimediagroup.com +971 52 755 5184 DEPUTY EDITOR GAVIN DAVIDS gavin.davids@cpimediagroup.com +971 4 375 5480 ASSISTANT EDITOR NEHA BHATIA neha.bhatia@cpimediagroup.com ADVERTISING COMMERCIAL DIRECTOR MICHAEL STANSFIELD michael.stansfield@cpimediagroup.com +971 4 375 5497 SENIOR SALES MANAGER YASIN ALVES yasin.alves@cpimediagroup.com +971 4 375 5496 SENIOR SALES MANAGER NITESH PATEL nitesh.patel@cpimediagroup.com +971 4 375 5483 MARKETING MARKETING MANAGER LISA JUSTICE lisa.justice@cpimediagroup.com +971 4 375 5498 MARKETING ASSISTANT BARBARA PANKASZ barbara.pankasz@cpimediagroup.com +971 4 375 5499 DESIGN ART DIRECTOR SIMON COBON 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 DIGITAL SERVICES MANAGER TRISTAN TROY MAAGMA PUBLISHED BY

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Stephen White Group Editor

MAY 2014

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.

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THE BIGGEST PICTURE

LANDMARK DUBAI CREEK TO BE REGISTERED AS UN HERITAGE SITE ‘BUSINESS NOT ONLY IN SHOPPING MALLS’, DUBAI MUNICIPALITY OFFICIAL SAYS URBANISATION IN DUBAI will not be limited to the zones created by the Expo planning committee, a senior government figure has said. Najib Mohammed Saleh, head of the Planning and Research section at Dubai Municipality’s Planning Department, spoke exclusively to Big Project ME and said that development would continue to be undertaken in the emirate if population growth rates rise above and beyond expected targets. While addressing a conference in Dubai, Saleh highlighted the emirate’s growth from its earliest construction beginnings in Al Fahidi, Al Ras and Shindaga areas to its current landmarks, such as Palm Jumeirah. “Al Fahidi remains the most important trading hub in the city,” Saleh said. “Even today, most trading activities take place there. Business is not only in the shopping

malls. We are in talks with the UN to register the creekside in Old Dubai as a heritage site,” Saleh revealed, hinting at major infrastructural revamps that might be undertaken at and around Al Seef Creek and Fahidi Souq in Bur Dubai. Additionally, Saleh claimed development would continue around Dubai’s other zones even after the Expo. “The committee (preparing for the Expo 2020) adopted the medium growth plan scenario, where we expect the total population to reach around 2.8mn,” said Saleh. “In the case of high growth numbers, the total urban area can extend up to 3.4ha. “Our current development plans don’t go beyond Dubai Outer Bypass Road, but that doesn’t mean the city won’t grow. Land will continue to be available for development, but only after 2020,” the government official revealed.

ALADDIN CITY n Number of towers: 3

n Total Built Up Area: 10,000sqm

n Highest tower: 34 stories

n Parking slots: 900

n Space between towers: 450m

n Deadline: Unspecified

Speaking of the increased construction capacities in the emirate, Saleh said upcoming projects, such as hotels and residential buildings would cover the existing demand for them in the city. “We have statistics from the tourism board that show we’re still short on rooms. This is easily noticeable when major events are held in the country. “There is definitely scope for three and four-star hotels to be developed as extensively in ‘New Dubai’ as they are in ‘Old Dubai’,” Saleh added. One such project is Aladdin City, which is in its first phase of construction. Municipality officials have confirmed that the project is being built outside the restricted zone and will not have any impact on the creek’s bid. It will include commercial offices and hotels in three towers spread over a distance of 450 metres.

MAY 2014

MIDDLE EAST

BIG PROJECT ME TRAVELS TO OMAN TO INVESTIGATE PROGRESS ON THE KEMPINSKI AT THE WAVE – PAGE 22 7

THE BIG PICTURE

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WORK SAFETY Saudi employers now have more responsibility for their workers.

MAKKAH MEGA TRAIN PROJECT TO BOOST LOCAL CONSTRUCTION BY $50BN Project to include 182km of rail lines and 88 train stations

SAUDI ARABIAN EMPLOYERS OBLIGED TO PAY FOR TREATMENT OF WORKRELATED INJURIES Saudi lawyer says payments for employees’ treatment are in line with Article 33 of KSA’s labour law SAUDI ARABIAN EMPLOYERS are legally bound to pay for the treatment of their employees for any injuries sustained at work. “The labour law provision stipulates that injuries be classified within categories according to a social insurance system,” Bandar Al Amoudi, a Saudi lawyer said, in a report by Arab News. “Vocational illnesses are classified within a work injury system and patient history will begin from the first medical citation of the illness.” According to Article 33 of the country’s labour law, employers are obliged to bear all expenses that arise from work-related injuries, including compensatory damages. Paid directly or otherwise, the total remuneration includes hospital stay, medical tests and analyses, X-rays and compensatory equipment and transportation to the point of treatment. “Employers will also be obliged to pay expenses for fatal cases resulting from workrelated injuries, in addition to compensation,” Al Amoudi added. Labour safety has assumed great importance in the GCC construction sector. Qatar has been criticised for its treatment of construction workers while on-site labour safety in the UAE has been on a marked decline despite numerous workshops organised to educate workers.

182 KMS

LENGTH OF RAIL LINES TO BE LAID DOWN IN MAKKAH

Makkah’s mega train project is expected to boost construction activity by at least $50 billion in the city and its surrounding areas, the project’s director has predicted. Ali Abdul Fattah, technical director of the Makkah public transport company, said that construction and operation of the project would be completed within 10 years and would cost nearly $39 billion. It will eventually include a total of 182km of rail lines, 88 train stations

and a large number of public buses, he added. According to a report by a local Arabic newspaper the project would generate a total revenue of $78.4 billion. “The project will contribute to expanding economic activity in the construction and operation sector by $49.78 billion,” he explained. Fattah added that the project would initially involve 114km of rail lines and 62 train stations by 2029 and that the project would be increased to 182km and 88 stations. “The first phase of the metro project is scheduled to be completed after three years and the network will include 44 km of lines and 22 stations,” the technical director concluded.

DUBAI INTERNATIONAL AIRPORT FACES 80 DAY UPGRADE Al Maktoum International Airport to see increased flight activity during this period AN 80-DAY LONG upgrade project, focused on enhancing current capacities and future expansions, has been planned for the Dubai International Airport, the aviation authority has announced. The construction works at Dubai International Airport will result in increased flight activity at the new Al Maktoum International Airport, Paul Griffiths, CEO of Dubai Airports, explained. “We have planned this project to optimise capacity while protecting service levels,” he said.

The upgrade work will be split into two phases, with the first leg of the project, held between May 1 and July 31 2014, involving the upgrade of runway lighting and construction of additional taxiways and rapid exits on the southern runway. Phase two will start on May 31, under which the 4,000m long northern runway, approaching the end of its design life, will be resurfaced. The second phase is expected to be completed by July 20, 2014.

MIDDLE EAST

BIG PROJECT MIDDLE EAST LOOKS AT HOW WE CAN SOLVE THE QATAR MARKET CONUNDRUM – PAGE 32

MAY 2014

THE BIG PICTURE

FOREIGN INVESTORS EYE OMAN LOGISTICS SECTOR Leading international companies keen on working with Oman government bodies OVER A DOZEN foreign companies have expressed interest in collaborating with the Oman Ministry of Transport and Communications for its planned projects worth almost $12 billion in the rail, ports, pipeline and airport sectors. Besides this $6 billion-worth railway network expanding over 2,250km, several other logistics and transport projects are being undertaken

LOGISTICAL INTEREST Oman’s project is attracting interest from a number of foreign firms.

in the country, such as the Duqm, Salalah and Sohar ports, the expansion of Muscat and Salalah International Airport, construction of airports in Adam, Ras Al Hadd, Sohar and Duqm. Companies such as Global Logistic and Supply Co. from Canada, Japanese Fujimoto Supply Railway and Supply Chain, and India’s Bharat Transport & Logistics Consultancy are also interested in the projects. “Oman is positioning itself in a good way to become a major supply chain and logistics hub in the Gulf, partly because of its strategic location and given the size of the country,” Suresh Das, senior project consultant at Bharat Transport & Logistics Consultancy told local daily Times of Oman. Other projects in the country include the construction of a logistic and supply chain in Barka, from the capital Batinah, and linked to the Al Sharqiyah region.

MAJORITY OF MADINAH PROJECTS IN DANGER OF FALLING BEHIND Government monitoring programme finds that 355 projects are at risk of falling behind schedule Only 121 out of 656 development projects in the Saudi Arabian city of Madinah are proceeding according to schedule, a government backed project monitoring scheme has found. Ada (performance) is an online government programme to monitor development projects. It was launched earlier this month. Local paper, Al Madinah, reported that 176 projects had been delayed, while work on four others had completely stopped. Another 355 are at risk of falling behind. Contractors blame a shortage of workers for the delays in completing their projects.

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THE BIG PICTURE

HOLCIM BUYS OUT LAFARGE TO CREATE WORLD’S LARGEST CEMENT MAKER New entity has combined sales of $43.89 billion and is worth just under $60 billion Switzerland’s Holcim has announced an all-share deal to buy France’s Lafarge, creating the world’s largest cement maker with combined sales of $43.89 billion. According to a Reuters report, the partners billed the deal as a merger of equals under which Lafarge shareholders will receive one Holcim share for every Lafarge share held. The combined group will be based in Switzerland, and listed in Zurich and Paris. The new entity is worth just under $60 billion, and will see

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53% percent shareholder control for Holcim and 47% for Lafarge, the companies said in a joint website statement. The deal is the cement industry’s biggest-ever tie up, and would help the companies slash costs, trim debt and better cope with rising energy prices, increased competition and falling demand, factors that have hampered the industry since the 2008 economic crisis. Shares in the cement producer rose 4% at the opening of trading and was rated as the top gainer on France’s blue-chip CAC 40 index, while shares in Holcim were up 5.4%. Lafarge is stronger in Africa and Holcim stronger in Latin America, company executives told reporters on a conference call, therefore the merger strengthens both entities.

STRONG RESULTS Nakheel reports strong Q1 results on the back of a robust performance in 2013.

$171m IN Q1 NET PROFIT 28% INCREASE FROM SAME PERIOD IN 2013

FRENCH FIRM TO BUILD EIFFEL TOWER REPLICA IN IRAQ Three-storey structure to be built in the northern Kurdistan city of Sulaymaniyah A FRENCH COMPANY has announced plans to build a three-storey replica of the world-famous Eiffel Tower in the Iraq city of Sulaymaniyah, the second largest city in northern Kurdistan. According to Yousuf Yassim, director of the Sulaymaniyah municipality, the building will be constructed for cultural and tourism purposes. He added that the city had given permission to the French firm to build the structure, along with other projects, including a French products shop. “In line with investment laws in Kurdistan, foreign investors are asked to carry out a tourism project in the city where they intend to invest,” he said, according to quotes by the Iraqi News Agency. “This French investor presented the Eiffel project to Sulaymaniyah municipality, which approved the project. It will have the same design as Eiffel Tower in Paris and will be equipped with laser lights showing the flags of Kurdistan and France,” he added without identifying the investor or giving further details of the project.

REPLICA TOWER A French firm will build a three-storey replica in Iraq.

NAKHEEL POSTS $171.24MN IN Q1 2014 NET PROFIT Strong first quarter results built on ‘robust financial performance in 2013’ NAKHEEL HAS ANNOUNCED first quarter net profit results of $171.24 million, a 28% increase on net profit from the same period last year ($133.6 million). The real estate developer also reported revenues of $471 million for the first three months of the year. In a statement, Nakheel said that the strong first quarter results built on the company’s ‘robust financial performance’ in 2013. Profits reached $699.7 million last year, a 27% increase from 2012. “Our robust financial performance is more conclusive evidence of our ongoing commitment to achieve our corporate objectives ahead of time, and further proof that we continue to move forward and to win investor trust and confidence. Our Q1 2014 results build on our impressive financial performance in 2013 and are a clear indication of what lies ahead for the rest of the year in terms of our financial success,” said Ali Rashid Looth, Nakheel chairman. “We continue to deliver ahead of our business plan, enhance our existing communities and expand our business and development portfolio, laying the foundation for a long term sustainable business. “In addition, we are well on course to further reduce our bank debt during 2014, having already paid off a substantial amount of $639.80 million a year and a half before it was due,” he added.

MIDDLE EAST

BIG PROJECT ME LOOKS AT HOW THE MEP INDUSTRY IS AHEAD OF THE CURVE WITH GREEN BUILDING – PAGE 48

MAY 2014

THE BIG PICTURE

GOVERNMENT MEASURES CAN INCREASE SUSTAINABILITY DEVELOPERS WILL ADAPT TO GREEN LEGISLATION, END-USER DEMANDS FOR SUSTAINABILITY, AUSTRALIAN GOVERNMENT OFFICIAL TELLS THE INDUSTRY

WATER THREAT Water shortages are a ‘real and urgent’ threat in the GCC region.

WHAT IS THE IMPACT OF GLOBAL ECOLOGICAL IMBALANCES ON CONSTRUCTION PRACTICES?

Construction activity leads to increased demands for power and water in a country. Industries cannot grow without thinking of the future. It is therefore critical to accommodate sustainable practices, such as intelligent use of fit to purpose water, efficient building designs, and optimal utilisation of concrete and so on.

that water can indeed be reused for different purposes will not be accepted until there is a real shortage of the resource itself, whether naturally or through increased costs. Thereon, it requires a change in end-user habits and attitudes to ensure resources are conserved, and this education begins with the youth. Water shortage is a very real and urgent threat in the region, and I know relevant government authorities in Dubai will actively work to avoid it.

WHAT ARE THE FACTORS DRIVING MODERN CONSTRUCTION MARKETS TOWARDS SUSTAINABLE PRACTICES?

IDEALLY, SHOULD THE SETTING OF SUSTAINABILITY TARGETS BE DRIVEN BY THE GOVERNMENT, OR THE PRIVATE SECTOR?

Urban centres are facing a rise in population, not only due to inherent local population growth, but also trans-migratory trends. This places a significant demand on urban environments, which when combined with economic development and objectives calls for intelligent sustainable city planning measures.

If governments set a vision and implement legislation and policies driven at sustainability targets, developers will automatically adapt to

IS DUBAI EQUIPPED WITH THE RESOURCES REQUIRED TO REDUCE ENVIRONMENTAL THREATS, SUCH AS WATER SHORTAGE?

the same. Eventually, if a city or country cannot show its sustainability quotient, chances are good it will fail to attract investors. WHAT ARE THE ADVANTAGES OF ACCEPTING SUSTAINABILITY FOR DEVELOPERS?

Sustainability is not only an ecological advantage for the owners, but also a long-term financial gain and cost-cutting measure. Increased education and awareness about sustainability amongst the public will motivate owners to accordingly meet the reformed market demand. It is much like the law against smoking indoors – once the masses see the logic behind a legislation, trends will alter accordingly, and companies will have to adapt to meet these demands.

“WATER SHORTAGE IS A VERY REAL AND URGENT THREAT IN THE REGION, AND I KNOW RELEVANT GOVERNMENT AUTHORITIES IN DUBAI WILL ACTIVELY WORK TO AVOID IT”

As is the case with most regions, the principle

MAY 2014

MIDDLE EAST

BIG PROJECT MIDDLE EAST EXAMINES THE REAL INDUSTRY COSTS OF PUSHING FOR SUSTAINABILITY – PAGE 40 11

NEWS ANALYSIS

REBUILDING EGYPT

MIDDLE EAST

Big Project ME analyses the impact of the deal between Arabtec Holding and the Egyptian government to build one million homes in the North African country. Gavin Davids reports

MAY 2014

BIGPROJECTME.COM

NEWS ANALYSIS

arlier this year, Arabtec Holding announced that it entered into a $40 billion agreement with the Egyptian government to build a million houses across 13 locations in the country, creating what is believed to be the Arab world’s largest housing project. Since the ouster of President Mohamed Mursi in July 2013, the UAE, Saudi Arabia and Kuwait have pledged billions of dollars in aid to Egypt. In the lead up to the general election, these investments will have a crucial impact on the direction Egypt takes in the near future. Therefore, it is safe to say that this $40 billion project is more important than it appears to be. With more than one million jobs expected to be created by the project, there is set to be a tremendous roll-on effect, as Dr Theodore Karasik, director of Research and Consultancy at the Institute for Near East and Gulf Military Analysis (INEGMA) in Dubai, explains. “Egypt is in desperate requirement of an injection of these types of projects,” he tells Big Project ME. “These types of investments help overall. It does trickle down into Egyptian society and it does provide stabilisation and potential growth.” “Clearly there will be more opportunities for employment. I think that the idea is to give employment to those who need it most, in and around these projects. I think that it’s a very positive development and if that model works, then we’ll start to see more investment in Egypt, because it is at the very core of the region and a stable Egypt is very important to the GCC.” This importance is reflected in the way the regional markets reacted to the news, with Egyptian real estate shares jumping to their highest level in more than five years as investors speculated that property developers would benefit from the agreement. Meanwhile, Arabtec shares climbed by as much as 3.5% before paring the increase to 1.7% to 4.88 dirhams on the day of the announcement. “This is positive news for Arabtec, and gives the group a favourable footing in Egypt

given the UAE’s support for the interim government,” says Nayal Khan, head of institutional sales and trading at Naeem Holding in Dubai, in an email to Bloomberg News. “Arabtec is the ‘latest channel’ through which the UAE is directing aid to Egypt, and the project adds substantially to the contractor’s backlog.” Dr Karasik explains that the decision to push through the deal, at least on the Egyptian government’s part, was because they had seen the success of the GCC construction model and wished to emulate them. “They have set up a system of embracing what I would call the ‘Gulf-like construction and infrastructure models’ and have imported them into Egypt and exported them from the Gulf states because this model works very well to create housings and the cities, if you will, that will rise up around these construction sites, and will provide social security and human security at the same time,” he says. The UAE-based Architecture and Planning Group has been appointed to prepare the master-plan for the $40 billion dollar project and El Sayed Zakaria, managing director of the company, told local media that the project would be implemented in three phases, with designs for the first phase set to be submitted in September of this year. He adds that contracts would be awarded two months from submission. Phase one of the project will see housing units being built in the Cairo industrial districts of Al Aboor and Badr City, along with the upper Egyptian governorate of Minya. Doctor Essam Nabih, business development manager for the Architecture and Planning Group, tells Big Project ME that as lead consultants for the project, the group would be handling basic engineering such as structural, electrical and mechanical, as well as being involved in the appraisals and feasibility studies as part of the masterplan. “There are one million units involved in this project and ‘units’ here refers to apartments. We’re talking about 13 plot locations in Egypt

MAY 2014

MIDDLE EAST

“EGYPT IS IN DESPERATE REQUIREMENT OF AN IN JECTION OF THESE TYPES OF PROJECTS. THESE TYPES OF INVESTMENTS HELP OVERALL. IT DOES TRICKLE DOWN INTO EGYPTIAN SOCIETY AND IT DOES PROVIDE STABILISATION AND POTENTIAL GROWTH”

NEWS ANALYSIS

BIGPROJECTME.COM

ARABTEC RESHUFFLE Sami Asad, former CEO of Arabtec Construction has been reassigned as the CEO of the newly formed Arabtec Egypt for Real Estate Development Asad was formerly the chief executive and chief operating officer at the Abu Dhabi property developer, Aldar. He joined Arabtec about a year ago as CEO of Arabtec Construction. “We believe the Egyptian economy, which holds high investment potentials in a broad range of areas, is poised for significant upturn,” said Asad in an Arabtec statement. Meanwhile, Dr Nabil Ailabouni will take over responsibility for the global operations of Arabtec Construction, reporting directly to the chairman and Arabtec Holding’s managing director and CEO, Hasan Ismaik.

MIDDLE EAST

His immediate focus will be to deliver a number of major projects recently undertaken and meeting business plans, targets and future expansion strategies.

MAY 2014

which extend across acres, and some of the projects will extend to becoming satellite cities due to the size of the projects,” he reveals. “We have been given the plots to have a look at them and explore them to help us design them appropriately. The designs will include all infrastructure required in satellite cities, such as schools, mosques, healthcare units, churches, city centres, retail outlets and all other services associated with the development. “While planning and designing for the project, we cannot forget that it is aimed at affordable housing and must be constructed accordingly to ensure that it is optimised by the segment it is targeted at,” Dr Nabih adds. Speaking about the actual construction process, the Group’s spokesman said that designers would also have to be aware of a number of factors, including both climate and social considerations. “Every part of the world has its own special climatic conditions, and construction designs also need to take other factors into consideration, such as the social and cultural elements of the area, as well as the need and requirements of the end-users in the market,” he says. “While designing for this project, we will definitely bear in mind that there exists numerous microclimates within the country which have to be considered. For instance, there’s a difference between working in north coast cities, such as Alexandria and Upper Egypt cities such as Aswan or Luxor.”

INFRASTRUCTURE BUILD The UAE, Saudi Arabia and Kuwait have been investing in Egypt to rebuild its infrastructure.

EGYPTIAN INVESTMENT n Value of the deal between Arabtec and the Egyptian government: $40 billion

n Number of homes that will be built: 1 million

n Number of construction locations across the country: 13

n Amount of aid sent to Egypt from UAE: $6 billion

However, some analysts have expressed reservations about the project. Kareem Ghaly, an equity analyst at the Egypt-based investment bank EFG-Hermes, says that there are concerns being expressed about the viability of the project. “In its last conference call, Arabtec management declined to give any guidance on its $40 billion MoU with the Egyptian Ministry of Defence. The management mentioned that the agreement is still in the structuring phase,” Ghaly says in an interview with The National. “The company did mention, however, that it will hold an analyst day in the coming weeks to disclose more details about this agreement. Until more solid facts are disclosed, we should remain cautious on the prospects of such an agreement.” Ties between the two countries have deepened in the recent months, with the UAE having extended $6 billion in support of the Arab world’s most populous nation following the unrest that followed the removals of Presidents Mubarak and Morsi. Saudi Arabia and Kuwait have also extended their assistance to Egypt as the North African country struggles with stagnating economic growth and a lack of international investment. “I think it’s very clear from recent deals that have been announced, not only with Arabtec, but with other entities in Saudi Arabia or the UAE. These two Gulf countries in particular, are trying to build Egypt’s infrastructure and help Seesi further consolidate his power as he runs for the presidency,” says Dr Theodore Karasik. “What this does is that it cements the relationship between the three countries – the UAE, Saudi Arabia and Egypt – and continue to push Qatar off to the side, which is one of the reasons that we saw this diplomatic furore between the GCC states. “We’ll have to see how the coming months unfold, given other regional events like the elections in Iraq, elections in Syria and of course the elections in Egypt. All of these are going to be factors and these countries are all going to be looking at each other and seeing how they’re behaving,” Karasik explains. “The UAE has a vision for how particular countries in the region are going to develop and they’d like to apply that model now because they want to make sure that the region becomes stabilised. From their point of view, there are many parts of the region that are destabilised and those regions or countries need to be targeted for investments in order to build new projects and social welfare, if you will. And in that sense, the government is pursuing this type of remedy.” n

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Delivering an integrated range of

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IN PROFILE BASHAR ABOU-MAYALEH

HARD ACT TO FOLLOW Big Project ME speaks to Bashar Abou-Mayaleh, managing director of Hard Precast Building Solutions, about the changing role of the precast industry in the UAE construction market

here is an old joke amongst Dubai residents that goes along the lines of: ‘If Rome is known as the ‘Eternal City’, then Dubai must be known as the ‘EverChanging City’. Granted, it’s not very funny, but it’s a truism that perfectly encapsulates the constant state of flux that is Dubai. Nowhere is this more evident than in the construction industry. According to the International Monetary Fund, the population of the UAE is expected to reach 6 million people by 2015, up from 5.4 million in 2010. The majority of them will decamp in Dubai, while a few will make their way to Abu Dhabi, Sharjah and the rest of the Emirates. So it’s easy to see why this population surge is considered to be the main growth driver

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“WHAT I BELIEVE, AND BELIEVE IN STRONGLY, IS THAT PRECAST WILL GO AHEAD AND TAKE A LARGER SHARE OUT OF THE CONCRETE WORKS IN THE CONSTRUCTION INDUSTRY. EVEN DURING THE DOWNTURN, THIS (PRECAST) KEPT GOING”

MAY 2014

IN PROFILE BASHAR ABOU-MAYALEH

“IT WAS A HUGE ACHIEVEMENT TO GET SUCH HIGHRISE STRUCTURES APPROVED BY THE DUBAI AND ABU DHABI MUNICIPALITIES. THEY ARE VERY STRICT ABOUT STRUCTURAL (SAFETY) AND THEY ARE VERY DEMANDING AUTHORITIES”

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for the increased demand for residential and commercial property units in the country. Construction is big business in the UAE, with the Dubai Chamber predicting that the sector’s contribution as a percentage of the country’s GDP will be 11.1% by 2015. Not only is it big business, but it’s also an expensive business. It’s not exactly cost efficient to be building towering skyscrapers and vast residential estates using the timehonoured methods of construction when there are hordes of clamouring real estate buyers looking to grab a slice of the pie. As a result, developers, consultants and contractors are starting to get savvy to different methods that will allow them to build cheaply and quickly, while continuing to maintain a high standard of quality. This is where Bashar Abou-Mayaleh comes in. As the managing director of Hard Precast Building Systems (HPBS), he is the man tasked with bringing to life the vision of the Al Shafar Group, the parent company of HPBS. Speaking to Big Project ME at his offices onsite at the HPBS precast factory in Dubai Investments Park, Abou-Mayaleh explains why he thinks precast concrete solutions are the next big thing for the UAE construction industry. “The resourcing of skilled labourers is becoming more and more difficult and construction companies in general are getting less skilled workers (than before), with more expenses. If we’re talking about the cost of labour for the companies, this includes labour accommodations, food, visas and so on. All these expenses are increasing. That’s why you have huge increases in the cost of labour and a lower output,” he points out. “What I believe, and believe in strongly, is that precast will go ahead and take a larger share out of the concrete works in the construction industry. Even during the downturn, this (precast) kept going. Knowledge about the precast industry is increasing within the construction industry. Developers, consultants, contractors, all the great achievements of the

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precast industry – in the UAE especially – are very well known,” Abou-Mayaleh enthuses. “The concrete precast industry in the UAE is ready to produce around 2 million cubic metres of concrete per year. This is a huge number and the infrastructure of the industry is ready to produce this. We have been producing, on average, 1.3 to 1.2 million cubic metres per HUGE DEMAND Bashar AbouMayaleh predicts that there will be a massive increase in demand for pre-cast solutions in the region.

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year, but now the advanced factories in the UAE are ready to produce, starting from this year, 2 million cubic metres of precast elements.” So confident is he of the predicted success of the precast industry, AbouMayaleh reveals that Hard Precast Building Systems is aiming to launch another factory to help cope with expected demand. “If we continue with only this plant, we expect that this factory will run at full capacity for the next four or five years, but we are seriously thinking about adding another plant to meet the very high expected demand and we are sure that the second plant will be fully booked - the production capacity will be fully booked for the next four or five years,” he claims confidently. The current facility was built in 2004 and has a total size of 1 million sqm.

IN PROFILE BASHAR ABOU-MAYALEH

“That was in early 2000. After two or three years, in 2004, we formed Hard Precast to fulfil the expected high requirements. You know the boom was crazy and we had come to the market at the right time. Our first project was Jumeirah Beach Residences, the biggest residential project in the world at the time. We were very successful because there were several sectors and several

“THE CONCRETE PRECAST INDUSTRY IN THE UAE IS READY TO PRODUCE AROUND 2 MILLION CUBIC METRES OF CONCRETE PER YEAR. THIS IS A HUGE NUMBER AND THE INFRASTRUCTURE OF THE INDUSTRY IS READY TO PRODUCE THIS”

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Having been involved with the UAE construction industry for more than 20 years, 15 of those with Al Shafar Group, AbouMayaleh is well-placed to offer comment on the changing trends in the country. “I’m an industry engineer by nature. I have an MBA in production management and I joined the Al Shafar Group when they decided that they wanted to go in with huge investment into the construction industry,” he relates. “I started, in fact, by making several feasibility studies within the construction industries and now the group has executed many of these studies. I found myself specialising in the concrete field after a while, so I formed, in the beginning, a hard block factory and I managed it from A to Z. It is still a sister company (in the group), along with Hard Precast.

pre-casters. The rate of our production and our speed of installation was unbelievable. We had started late because our installation facilities were still under installation, yet we finished the project three or four months before any of the other pre-casters,” he tells Big Project ME proudly. “After that we were involved in many prestigious landmark projects. We have covered all the applications of precast in the building sector. We are not in the infrastructure sector as such, but we’ve worked across all the applications, horizontal and vertical applications included. In fact, we were the first pre-caster to enter high-rise buildings with structural precast solutions,” Abou-Mayaleh adds. This was, he concedes, a challenge, given the complications that came with it. As one of the first precast companies to move into highrise construction, HPBS naturally had to deal with stringent inspections and expectations from government bodies, none of whom were prepared to allow for any lapses or leeway. “It was a huge achievement to get such highrise structures approved by the Dubai and Abu Dhabi Municipalities. They are very strict about structural (safety) and they are very demanding. (As a result,) we brought in precast technology and we were a pioneer in the Middle East, bringing the latest in precast technology into the region. That helped us very much,” he says. “See, the precast industry in the Middle East was made for the work and mould industry, but we brought in automated production lines with very specific production processes. We have specialised teams that deal with every process of production and the results have been very good. You have much bigger quantities and much better quality.” One of the biggest projects Hard Precast Building Systems is currently involved in is the Citywalk project that is on Al Wasl Road. Owned by Meraas Holding, the development is a retail and leisure destination for visitors and residents in Jumeirah. “It’s a huge project that lies on a big patch of land from behind Al Mazaya Centre and

IN PROFILE BASHAR ABOU-MAYALEH

Al Wasl Road. The phase we’re working on right now represents a really small part of it. We are working with the stakeholder of the project. We have developed and redesigned the project into total precast solutions. It was a little challenging because of their very high architectural requirements.” “As you know, architectural requirements are often the enemy of modular solutions! The project has started and it is being seen and is attracting the eyes of everyone who passes by. We have signed on for a big part of the project and there is more to come. The main contractor is discussing the second phase with us. As for the precast superstructure, it will be finalised over the course of 2014,” he explains. This attention to detail is what sets HPBS apart from its competitors, Abou-Mayaleh says. He adds that his company was one of the first pre-casters to meet the Dubai Municipality requirements for thermal insulation when they were increased dramatically in 2005, a consequence of their preparations and research. “Our insulated wall panel systems were immediately finalised and approved by Dubai

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“THIS IS THE CULTURE OF HARD PRECAST. WE WILL ALWAYS BE A STUDENT IN SUCH A HUGE AND CREATIVE INDUSTRY” Municipality. Now we are ready to make some further developments. They are already looking to make some major increases to the thermal insulation requirements. We are almost done with our research and develop, and our trials. We are ready for that,” he says confidently. “We are always prepared because the (results of the) studies have been put in our hands a few years before,” he says, discussing how HPBS prepares for changing requirements from government bodies. “The implementation of these very high new requirements is not new. We

WALK INTO THE FUTURE December 2013 saw the opening of Citywalk by Meraas Holding in the Jumeirah area of Dubai. Phase 1 of the Citywalk covers more than 350m of retail frontage, along with a tree lined walkway designed in the style of European high streets. Future phases are expected to be activated shortly, with the entire project promenade set to run for a length of 1.3km. Located at the junction of Al Wasl Road and Safa Road, the development is within easy walking distance of surrounding residential areas and is a 15 minute walk from the Dubai Mall metro station. It can also be accessed from Sheikh Zayed Road via Interchange 1. The project also has an artificial lake which is designed to create a public square for visitors, with outdoor seating providing views of the Burj Khalifa. The retail units have been designed to provide a modular 9m retail frontage, with building depths that range from 12m, 15m and 18m. They are intended to be adaptable to the retail requirements of the lease holders.

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Smaller pavilion buildings and kiosks have also been incorporated into the design. Multiple access points to the site have been developed, along with ‘ample’ car parking spaces, Meraas added.

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TOTAL INVOLVEMENT HPBS has been heavily involved in the design and development of Citywalk on Jumeirah Beach Road.

have gone through all these environmental developments and implementations, along with Dubai Municipality, Estidama, and all these other environmental regulators.” “This is the culture of Hard Precast. We will always be a student in such a huge and creative industry. “There are, each and every day, many new ideas and we are always very enthusiastic about catching the suitable ideas, to bring in the latest business practices in the world, adopt them here and feed them within our operations,” he asserts. “We have a very active research and development department and we are eliminating the outsourcing of things, we are producing many of our own miscellaneous requirements in house and under very strict controlled environments. “Furthermore, our internal school trains a new generation of skilled people who are specialised in our detailed processes, each and every day,” the managing director of Hard Precast Building Systems explains further, highlighting just how committed he and his parent company are to pushing forwards the cause of precast solutions in the UAE and further abroad.

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ON SITE KEMPINSKI, THE WAVE, MUSCAT

CONVOLUTED CONSTRUCTION Building the Kempinski hotel has been a long and convoluted process for project director, Peter Willmott, of Faithful + Gould.

Kempinski Hotel, Muscat

Project Developer

Oman Hospitality Company

Project and Development Manager

Faithful + Gould

Project value

$220.77 million

Construction contract

$129.8 million

Contractor

Carillion Alawi

Consultants

WSP and Woods Bagot

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Project Name

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ON SITE KEMPINSKI, THE WAVE, MUSCAT

CATCHING THE WAVE MAY 2014

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Big Project ME takes a tour of the construction site of the Kempinski hotel on The Wave. Gavin Davids reports on this most challenging of projects in Muscat, Oman

ON SITE KEMPINSKI, THE WAVE, MUSCAT

n November 13, 2013, the foundation stone for the Kempinski Hotel, part of The Wave project, was laid, marking the beginning of construction for one of Oman’s most convoluted hospitality construction projects. Originally designed between 2009 and 2010, the project was only tendered at the start of 2011 before being put on hold. During that period, the project was sold to nine Omani pension funds operating as a single entity-the Omani Hospitality Company - from its original owner, The Wave. Further complicating progress on the project was the sheer scale of it. Clocking in at more than 45,000sqm, the Kempinski hotel project is a mammoth undertaking in any circumstances, never mind one with so many stakeholders and vested interests. The hotel will offer 309 rooms and 77 hotel apartments, in addition to a range of facilities including halls that can accommodate in excess of 750 people. Twelve local and international restaurants and cafes are also being built, not only to cater for hotel guests, but also for residents in the surrounding properties operated by The Wave. As Peter Willmott, project director for the development says, the building isn’t revolutionary in terms of its design and build. However, because it is one of the largest hospitality projects in Oman, it comes with added pressures. “As well as being a hotel for guests, it is aimed at providing facilities for the surrounding residents. There are significant

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FIVE STAR COMFORT The hospitality project will have 309 hotel rooms and 77 hotel apartments.

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F&B and leisure offerings in the hotel that are aimed at The Wave residents as well as hotel guests,” he explains to Big Project ME during a tour of the massive construction site. “That’s just because at the time, when the development was done (back in 2009), you were basically looking at food and beverage concepts that were done in 2009 and then you’re going to open them in 2015. That’s the main challenge that’s resulted from the delay,” Willmott adds. Having worked for no less than three different organisations on the project, Willmott is perhaps the perfect person to head up the Kempinski site, having been involved initially with The Wave development team and then as project director for Confluence. With that organisation evolving into Faithful + Gould, he says that it is time for the project to begin picking up a head of steam. “We (F+G) have a project management and development management role on the project. At the moment, there are five staff associated with the project. We’ve got myself as project director. We’ve got a full time project manager who’s also managing the staff accommodation project as well – which is for 600 staff. Then we’ve got a full time project manager who is managing the delivery with me, and we’ve got a document controller and a part time planner who comes in when needed,” he outlines. As Willmott touches upon, part of his job as project director is to manage all the associated facets of the site. This includes working with the contractor, Carillion Alawi, and

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ON SITE KEMPINSKI, THE WAVE, MUSCAT

LOTS TO COVER The entire project covers a total area of 45,000sqm.

the consultants, WSP and Woods Bagot. “What we did was that we sat with each package and went through each package with potential people who were put forward by Carillion. We worked hand-in-hand with Carillion to do that,” he explains. Another stakeholder to include in discussions was the hotel operator. “Kempinski were quite involved in the design and layout of the hotel and how the rooms functioned, all the early parts of the design. But in terms of there being any specific requirements, there were a few features new

to Kempinski, which have been grown, but the major challenge that you’ve got is making sure a design commenced in 2009 is still cutting edge and relevant upon opening in 2015.” Thanks to the tweaks in design and planning, Faithful + Gould, and Willmott in particular, had to undertake extensive value engineering to ensure that the client’s target was met. “It’s been quite an exhaustive process to go through,” Willmott relates, “The remit for that is not about quality or cost cutting, but it’s more about selecting the right manufacturers or opening the market up to competi-

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“AS WELL AS BEING A HOTEL FOR GUESTS, IT IS AIMED AT PROVIDING FACILITIES FOR THE SURROUNDING RESIDENTS BECAUSE THERE AREN’T THAT MANY FACILITIES ON THE WAVE”

tion, which isn’t as prevalent in Oman (as it is in the rest of the GCC),” he explains. With a total development budget of $220.77 million, which includes a construction contract of $129.8 million to Carillion Alawi, the need for value engineering becomes stark, especially when measured against the extremely tight construction schedule facing the project. “It’s between the third and fourth quarter of 2015. We’re tracking slightly behind schedule at the moment, but that’s mainly due to one of the value engineering solutions being to redesign the frame to a post-tensioned solution. So there’s been some delays that weren’t projected in getting that design complete and approved. But we still aim to maintain those completion dates,” Willmott asserts. “There’s three working fronts which are being done. One is the hotel apartments, then you’ve got two shifts working on the hotel, there are ten large concrete pours only in the foundation slab. There’s probably 50,000m3 of

ON SITE KEMPINSKI, THE WAVE, MUSCAT

JOB CREATOR Owned by the Omani Hospitality Co, the Kempinski hotel is expected to create 600 direct jobs; as well as other economic direct and indirect returns. “The whole project is a value added to the growing tourism sector in Oman,” said Shaikh Rashid bin Saif al Saadi, Chairman of OHC. The hotel is to be operated and managed by Kempinski Hotels. Oman National Bank, Oman Arab Bank and Bank Sohar signed agreements with OHC to provide finance for the project. OHC was established with the objective of developing hospitality related projects in Oman. The shareholders of OHC, which include OBIC, National Investment Funds Co (NIFCO) and several Omani pension funds, are focused on developing projects that will support the sultanate’s objective of developing the

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tourism sector.

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concrete to go into the project. There are quite a large amount of resources that are required.” “Post-tensioning will reduce the amount of steel tonnage, it’s probably just under 20,000tons of reinforcing steel, but we’ve got a number of different structural solutions,” he adds. “There’s what can be described as a lantern design for the ballroom, that’s in structural steel with a concrete and metal roof. Then we’ve got traditional cast in-situ foundations and slabs for that element. You’ve got post-tensioning for the main repetitive blocks,” he adds. “Most of the other stuff wasn’t a change in the product, it was just a re-specification. We valueengineered sanitary-ware and saved $544,000.” Wilmott points out that because the project has been around since 2011, the supply chain was priced according to those prices. “The supply chain was a bit reluctant to reengage and give the best price for the project because it’s been around for so long. Post getting a letter of intent out and the project

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WORK ON ALL FRONTS There are three working fronts on the project: the hotel apartments, the hotel and staff accomodation.

PROJECT SPECIFICATIONS n Total size of project: 45,000sqm

n Total built up area (hotel): 61,000sqm

n Total built up area (hotel apartments): 20,000sqm

n Total concrete pour: 50,000m3

n Total steel tonnage: 20,000 tonnes

n Total work force: 2,000 – 3,000

actually being tangible again, we could go sit with specific suppliers who maybe weren’t that interested in giving the best price possible at the time of tender. We took about $176.9 million off in terms of value engineering,” he reveals. While value engineering understandably took up a lot of the project team’s time, there were a number of other concerns unique to Oman that have conspired to delay the project. One such issue was making sure that the height of the buildings did not exceed set limits. “Everything in Oman is low-rise,” Willmott says. “(Six storeys) is within three or four meters of the maximum height because we’re within range of the radar for the airport.” Another issue has been the difficulty in sourcing labour, with Willmott pointing out that the current visa situation in Oman needs to be addressed due to the difficulty expatriate workers face when it comes to getting into the country. With the project’s peak workforce expected to be in the thousands, this is an issue that

ON SITE KEMPINSKI, THE WAVE, MUSCAT

needs to be urgently addressed before any major construction projects get started. “Right now, there’s probably around 500 workers on site, which doesn’t look like many because it’s so big. I’d imagine that it’ll be between 2,000 and 3,000 at peak.” However, this presents a whole other set of complications due to the construction site being right next to a high-end residential area that expects a certain level of serenity, something that would be difficult to achieve with 2,000 labourers working from dawn to dusk.

“We’re in a residential area so controlling noise and disturbance to surrounding residents is important. Right now, it’s not at its nosiest, but it’s going to restrict working hours because the master developer has rules that say you’re not allowed to work (during certain hours). This puts more stress on the programme, because if you lose time, you find it difficult to catch up.” So how feasible is the construction completion date of September 2015, given the numerous restrictions the team faces? Despite the very tight schedule, Willmott remains relatively confident the project will continue smoothly, even with the looming Ramadan schedule that will be enforced in summer. “It’s still feasible for now,” he asserts. “Obviously when you reach the summer months, you’ll have to do concreting works at night anyway because you can’t pour concrete in the heat. “Most sites switch to nights, but then we may have problems switching to nights because the residential population here is 50% Omani and 50% expatriate. So you’ve got half the population up at night and the other half of the population up during the day time! That’s a challenge we’re going to have to get through.” “During the summer and Ramadan periods, you can lose a lot of time if you do not work those alternative hours, so what we’ve done is to work closely with the immediate surrounding residents, with community liaison officers, to make sure we provide bulletins and regular updates on construction. That’ll need to be further increased as work progresses and has the potential to further impact on their environment,” Willmott explains to Big Project ME. “As we get inside the building to do fit-out works, we may be able to do night shifts because the noise is controlled, but it’s still fairly early in the project to be looking at that because the peak labour force is about six months before the end of the project, when all the fit out trades are running concurrently, along with MEP and other various trades,” he says. Willmott adds that Voltas has been appointed as the MEP contractor for the Kemp-

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“THE REMIT FOR THAT IS NOT ABOUT QUALITY OR COST CUTTING, BUT IT’S MORE ABOUT SELECTING THE RIGHT MANUFACTURERS OR OPEN THE MARKET TO COMPETITION, WHICH ISN’T AS PREVALENT IN OMAN”

inski project, while other main packages are going through the final procurement phases. On top of all these precautions, there are a number of other issues for the construction team to consider. With the hotel being built on the beachfront, Willmott says that special precautions have had to be taken to ensure that the site is dewatered properly. “Groundwork was done as an early works package. There are no piles. What we did was ground improvement. This is because the ground is capable of dealing with supporting the buildings without piles,” he explains. “We’re going to have four tower cranes. There are three up at the moment. They’ll be supported by mobile cranes, which will be used to deal with the difficult areas. There’s obviously excavators and dewatering systems on there now. All the dewatering is going into the sea. There’s quite a lot of water actually, because you’re almost trying to dewater the sea!” “There’s an extra-robust tanking system in the basement because half the basement will be in the water table constantly, if the dewatering is switched off. That’s another challenge in design, because you ideally don’t want to be placing concrete in water as water always finds its way through. So we’ve got a double barrier system in the basement to deal with any potential ingress. That’s one of the challenges that you get building on the beach. This area also has a lot of standing water everywhere because when it rains it doesn’t go anywhere because the water table is so high in this area,” he explains “A number of residences here have a halfbasement to avoid that (problem). They stick half out of the ground, that’s why their parking lots are so short. If you actually go into the water table, it pushes your costs up a lot. We have tried to keep a lot of the building raised up, to keep out of the water table, but then we couldn’t get the parking in. With the height restrictions, you have to get a certain amount into the basement, and that was done earlier on and we’ve moved it up as far as possible,” the project director asserts. With the amount of dewatering going onsite, Willmott is quick to point out that there are stringent tests in place for the water that is being pumped back into the sea. This is one more example of how seriously the Sultanate is taking its responsibilities towards environmental laws and further indication to the importance being afforded to this hospitality project, which is set to become a beacon for the potential of Oman as a eco-tourism destination for both the GCC and the international market.

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TIME OF CHANGE Qatar Shell is looking to involve more local contractors and suppliers in its projects.

MAY 2014

SPECIAL REPORT OIL & GAS

OPPORTUNITY KNOCKS

Qatar’s oil and gas industry is in the midst of tremendous change. Big Project ME sat down with Qatar Shell to find out how the game is changing for local contractors and suppliers and trust in their ability to add value to our operations in Qatar,” Sawan says. “The new business opportunities we are offering to Qatari SMEs is to allow to them to become the supplier of choice for the Pearl GTL plant.” Sawan said the contract for the manufacturing of personal protective equipment was awarded last year to Qatari Industrial Equipment while GEA Batignolles Technologies Thermiques Qatar received the heat exchanger re-tubing contract. A third contract for translation services, Sawan added, was awarded to Snow Comms Conceptual Communications and Events. “In support of our valued partner Qatar Petroleum and in close collaboration with QDB, we are committed to the Qatar National Vision 2030 by developing local content and SMEs. I am delighted to report that we have certainly made progress in this area,” he says. “Just last year, we held our very first SME Business Opportunity Workshop, and it was during this process that three contracts were awarded to local suppliers. This year, we are revealing seven new specific

“THIS IS ABOUT BEING MUCH MORE OPEN MINDED TO GIVING TIME TO SUPPORT PEOPLE THAT SEEM TO HAVE ALL THE RIGHT INGREDIENTS BUT NOT THE OPPORTUNITY”

business opportunities within the Pearl GTL plant to local SMEs,” he adds. The value of these projects is $8.2 million to $13.77 million over the three to five year lifetime of the project. This year’s issuing of contracts expands on the initial set awarded last year to four Qatari companies. Sawan reveals that both his organisation and QDB continue to learn how to better identify vendors and suppliers while improving the support they require to reach the high standards required to serve a global player like Shell. “The big thing we have done differently is that we have been much stricter in our definition of the criteria that are required to qualify for one of these contracts,” explains Sawan. “We wanted to make sure that we are hitting certain target sectors. So this year we have increased the number of criteria required, including introducing a requirement for the company to be at least 51% Qatari owned, that the head office is here in Qatar, and thirdly and most importantly that the company doesn’t have revenues of more than $27.4 million.” The reasoning behind such stringent measures is to ensure that smaller suppliers and contractors have the opportunity to bid for business, in an environment where they would have previously been out-muscled by bigger and more experienced international firms. “We’re really trying to make sure that we don’t broaden the opportunities beyond the target sector that we are really focused on. We do give opportunities to the others in other areas.” “A big part of this is definitely the Qatar 2030 Vision and what we can do to support it. The second part of it is the recognition globally at Shell that having a local supply chain is much more effective than having

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s the holder of the world’s third largest proven conventional gas reserves, Qatar’s rise to being the leading global exporter of Liquefied Natural Gas (LNG) has been the catalyst for it becoming one of the most lucrative constructive markets on the planet. This has been typified by the major infrastructure investments that have been launched to support the diversification of the economy, leading to double-digit growth in the non-hydrocarbon sector. In its latest ‘Qatar Economic Insight’, the Qatar National Bank says that the main areas of investment have shifted from oil and gas to construction and transport. The bulk of these projects are expected to be completed ahead of the 2022 FIFA World Cup. Qatar has enormous oil and gas wealth, with its gas reserves estimated at 885,000 billion cubic feet in 2013 and proven reserves of around 193 billion barrels of oil equivalent (boe) in 2012. Therefore, as part of its shift away from the hydrocarbons sector, the Qatar government has decided to implement a moratorium on further gas development in the North Field until at least 2015, with the exception of the Barzan project, the QNB report says. However, this does not mean that the oil and gas sector will be neglected. Quite the contrary, as the managing director of Qatar Shell explains. Speaking to Big Project ME in Doha, at an event organised by Qatar Shell to promote the private sector, Wael Sawan says that his company will be looking to support local suppliers and EPC contractors as part of a drive to achieve a ‘sustainable economy’ and ‘facilitate the private sector and a diversified economy’, as per the directives of the Qatari government. “At Qatar Shell, we have confidence in the quality and capabilities of local suppliers

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VAST RESERVES Qatar is estimated to have 885,000 billion cubic feet of LNG reserves.

ECONOMIC DIVERSIFICATION Qatar is expected to move away from its reliance on gas for revenue and switch its focus towards petrochemicals and fertilizers in a bid to diversify its economy, industry. According to data from the Energy Information Administration (EIA), Qatar is the world’s largest exporter of LNG. It is estimated that it had natural gas reserves of 885,000 billion cubic feet in 2013. Furthermore, data released by the Organisation of the Petroleum Exporting Countries (OPEC) showed that oil and natural gas account for about 60% of the country’s GDP and around 85% of export earnings. In 2012, Qatar produced 16.8 million tonnes of petrochemicals, according to Gulf Petrochemicals and Chemicals Association (GPCA).

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As part of its long term plans to develop the sector, the country is expected to invest $25 billion to boost its capacity in the petrochemical sector to 23 million tonnes by 2020 Upcoming petrochemical initiatives in the country include the Al-Karaana petrochemical project and the Qatar Petroleum’s Ras Laffan Gasoline and Aromatics Project (RLGAP).

MAY 2014

an international one,” he points out. “(This is so that) that you have access at the source, so if there is a problem you only have to go locally to work with them. There is always a requirement: there may be a different holiday there, or a shipment may not come through, knowing that we have the full security of being in the same country as the supply base gives us reassurance. When you need things, Murphy’s Law dictates that you need them yesterday. You need quick access,” Wael Sawan insists. Nick Van Keulen, head of contracts and procurement at Shell Qatar is quick to weigh into the discussion about backing local contractors and suppliers over international players in the Qatari oil and gas market. “This is not a numbers game – this is about localising your supply chain. We have a large manufacturing facility and if we make ourselves completely dependent on companies outside of Qatar, when we have a problem how are we going to fix it? “You can make a phone call to Europe and the US but before you know you’ve waited a week for a part to be shipped here. If you’ve got someone around the corner you can pick up the phone, go to them and you can fix it. It makes a lot of sense,” he asserts.

“If you go to Rotterdam or Houston, you have a big conglomeration of big refineries and a whole supply chain around it. Ultimately that’s what we want here,” Van Keulen adds. “So we’re working with companies to find out what we can do locally and (what we can) outsource. Having Qatar Petroleum as a partner lets us find out what’s in the market. It’s all about getting the stuff done locally.” What is interesting about this drive towards creating a self-sustaining oil and gas industry in Qatar is that it is pushing the contractors and suppliers in the market towards meeting higher international standards, while simultaneously benefitting them from a business perspective. The success of this method becomes crucial when you consider how difficult it has been to get the wider GCC construction industry to embrace tougher standards. “It’s a two-way process. We will not drop our minimum qualifications,” says Wael Sawan. “This is much more about being much more open minded about giving time to support people that seem to have all the right ingredients but not the opportunity. You give those people the opportunity to become world class in the way they think about not just the way they think but the way they execute the process.”

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MARKET REVIEW QATAR

THE QATAR CONUNDRUM

MIDDLE EAST

Big Project ME reviews the impact of population growth on the burdened but promising Qatari construction market

MAY 2014

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MARKET REVIEW QATAR

atar’s population, if estimates are to be believed, will spike to 2.4 million in 2015 from its current figure of 2.1 million. Frank Harrigan, director of the Department of Economic Development at Qatar’s Ministry of Development Planning & Statistics (MDPS), speaking at a conference in December 2013 said he expected population growth by up to 15% over the next two years as the country readies to host the FIFA World Cup 2022. “Currently the population is about 2.07 million, but it will continue to increase over the next two years,” Harrigan said while speaking at the Qatar Energy and Water Efficiency Conference 2013, according to The Peninsula. In the short duration between Harrigan’s comments in December 2013 and February 2014, more than 100,000 people have been added to Qatar’s population. (According to MDPS figures, the country’s total population as of 28 February, 2014 was a record 2,116,400 – a short-lived record nonetheless, beaten by the country’s population numbers of 2,144,101 persons for 31 March 2014.) Infrastructure building to facilitate and accommodate this inflow, therefore, can expect notable acceleration. Studies released by Deloitte in July 2013 stated the Qatar Tourism Authority plans to invest almost $20 billion on tourism infrastructure as the number of tourists grows at a rate of 15.9% compounded annually, expecting to peak at 3.7 million by 2022. Additionally, a report by Kuwait Financial House in October 2013 estimated that the total bill for Qatar’s roads and railways will be as much as $100 billion. While largely considered a part of the country’s preparation for the World Cup in 2022 and its longer term Qatar National Vision 2030 development plan, the rail projects are also deemed necessary for a country currently grappling with road congestion issues as it waits for alternate transport system. It becomes critical then to ensure the construction industry in Qatar, considered an unconventional host for the prestigious FIFA World Cup, overcomes the challenge of securing the supply of raw material it needs. Worryingly,

the oil and gas-rich state has yet to put forward a cohesive programme to suggest it is willing to tackle a looming bottleneck in supply. Qatar’s cement industry, for instance, will have to ramp up its capacities to meet the future estimated demand in the country. According to a report titled ‘GCC Cement Sector Quarterly – Q3 2013’ by Global Investment House, the Qatari government’s demand estimates for 2013 fell short of the real demand for cement during the period. The country seems keen on proactively alleviating this shortage – early in April 2014, worldcement.com reported that the state-owned Qatar National Cement Company (QNCC) has signed a contract, worth $260.9 million with French company Fives FCB for the construction of a fifth cement production line. With a capacity of 5,000 tonne clinker per day, the construction completion has been scheduled for within 27 months. However, Qatar will have to keep a close eye on its materials market to ensure the cost of eliminating such shortages does not lead the market into a period of dangerously high prices. “All construction markets have a boom/ bust cycle that affects pricing, and Qatar’s will be no different,” said Raj Achan, business development manager of Hilson Moran UAE to Big Project ME. “Nonetheless, given its small size, the Qatari construction market will have to be careful with its operations to ensure it does not witness a huge spike in the prices of materials.” The possibility of material shortages opens up a distinct portion of the Qatari construction market; foreign suppliers would naturally find such a market lucrative as it closes in on its deadline for a leading world event. This is one of the many factors that has driven Raj Paryani, general manager of Mac Al Gurg to set up an office in Qatar. “On an average, there are fewer suppliers in the Qatari market than is required to meet the actual demand,” says Paryani. “For us (Mac Al Gurg), it made more sense to establish presence in the local market, which lets us be closer to the contractors and other operators we are working with. “The rate of construction in Qatar

“THE PROJECTS IN THE CURRENT MARKET SCENARIO ARE DEFINITELY DRIVEN BY THE GOVERNMENT SECTOR, BUT THIS COULD CHANGE IN THE YEARS TO COME. I SEE SCOPE FOR PPPS TO BE FORMED IN THE COUNTRY”

MAY 2014

MIDDLE EAST

POPULATION SPIKE By next year, Qatar’s population is estimated to reach 2.4 million people.

MARKET REVIEW QATAR

BIGPROJECTME.COM

CANCELLED PLANS Qatar recently announced it was scaling back on the number of stadiums it was building for the 2022 World Cup.

RISING COSTS, DELAYS CAUSE QATAR TO REDUCE STADIUMS FOR WORLD CUP 2022 Qatar recently announced that it will reduce the number of stadiums it plans to build for the 2022 FIFA World Cup by a third as rising costs and delays plague the build up to the event.

MIDDLE EAST

makes it essential for us to be in the market itself, since we can definitely do a lot more for the market remotely than from Dubai,” Paryani continues, explaining his rationale behind setting shop in Qatar. Market demand considered, there is a far more decisive force that Paryani claims has driven his brand into the Qatari market – local construction operators in Qatar continue to prefer working with trusted and known associates who are easily accessible within the geographic parameters of their market. “Contractors tend to derive confidence from local traders they have consistently worked with, especially during the moments of heightened activity, when contractors require added support and crisis management solutions from their suppliers.” Achan echoes this view, stating all markets within the GCC have their own unique methods of operation. “Each market has its own set of requirements, and it is key to have an understanding of the market’s local culture and the right way of doing things. The same applies to Qatar, where smooth set-ups require that the client has excellent relations in the contractors and consultants it works with.” To establish such rapport is especially of consequence in a market that is largely driven by governmental activities, where

MAY 2014

According to a Bloomberg news report, Ghanim

plans to build eight stadiums for the games.

Al Kuwari, the organising committee’s senior

The GCC country had originally announced

manager for projects, said that following an

plans for 12 stadiums, including nine new playing

assessment of needs on the ground, Qatar now

fields and three refurbished grounds.

infrastructure-building remains the prerogative of national bodies such as Ashghal (Public Works Authority), Qatar Railway Development Company, Qatar Tourism Authority and so on. Achan believes this is where the scope for public-private partnerships (PPPs) in the country will play a potentially fundamental role in shaping Qatari construction’s landscape. “The projects in the current market scenario are definitely driven by the government sector, but this could change in the years to come. “There is huge potential for growth in the country, and it is an exciting time for new or foreign companies wishing to enter

“GIVEN ITS SMALL SIZE, THE QATARI CONSTRUCTION MARKET WILL HAVE TO BE CAREFUL WITH ITS OPERATIONS TO ENSURE IT DOES NOT WITNESS A HUGE SPIKE IN THE PRICES OF MATERIALS”

and compete in the market. I see scope for PPPs to be formed in the country.” However, the case for foreign entries may be far more complicated than it would seem. To say Qatar has been scrutinised from all angles for its treatment of workers would be understating the situation. Following the release of a report on the same matter by Amnesty International, several organisations, such as the International Trade Union Confederation and the International Labour Organisation have critiqued Qatar’s non-implementation of its labour laws, especially against contractors and other private entities which are equally party to the committing of reported human rights’ violations. These concerns do not serve the Qatari construction market well at a time it requires collaborative efforts to fulfill its commitments – but they are not the only loopholes in the country’s governance of its construction market. “There are small niggles that could evolve into bigger problems when viewed as part of the entire construction process,” says Paryani. “For instance, there have been cases where a contractor looking to fly in migrant labourers was specified, by representatives in government bodies, exactly how many people they could bring in from each country. “While this step most definitely would have had justifiable reasoning behind it,

MARKET REVIEW QATAR

QATAR POPULATION – AN OVERVIEW SOURCE: THE WORLD BANK

1,749,713

1,564,082 2009

2010

1,910,902 2011

contractors require freedom to operate, and are likely to be appreciative of a more liberal policy that does not tightly control their operations,” Paryani continued. Achan offers a unique perspective on the Qatari market, comparing it with the UAE’s to explain the obvious flaws and scope for potential in the former. “Construction processes in Qatar may sometimes take longer when compared with, say, the UAE, but that is largely due to the fact that the Emirati market is more evolved than most its GCC counterparts are,” he explains. “In terms of legislation, the UAE market is probably 10 years ahead of its contemporaries. Having said that, Qatar is definitely making

2012

the required amendments to ensure its Vision 2030 is optimally achieved, such as the implementation of Global Sustainability Assessment System with their projects.” Qatar’s acceptance of GSAS is pivotal to its construction industry, as is the formation of the Qatar Sustainability Assessment System (QSAS), a set of regulations which extensively

focuses on the environmental efficiency of all construction in the country. Developed by the Gulf Organisation for Research and Development (GORD) in collaboration with TC Chan Center at the University of Pennsylvania (USA), QSAS regulations have been undertaken by the developers of Lusail City in Qatar. “The acceptance of GSAS is picking up in Qatar, and the country has implemented parts of it in some of its developments already,” Achan explains. “However, it is critical for the market that it does not consider cost consciousness as independent of its sustainability targets and to ensure that both, environmental and economic sustainability and balance are not viewed as being exclusive of each other.”

“ALL CONSTRUCTION MARKETS HAVE A BOOM/BUST CYCLE THAT AFFECTS PRICING, AND QATAR’S WILL BE NO DIFFERENT”

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THE DARK SIDE OF MIGRATION In November 2013, Amnesty International released a report, titled ‘The Dark Side of Migration’, detailing cases of labour abuse discovered across Qatar’s construction sites. The 169-page study was based on interviews with labourers, employers and government officials. Documented abuses in the report included non-payment of wages, rampant spread of the kafala system (which notably includes the legally-prohibited process of confiscating workers’ passports), hazardous working conditions and the provision of ‘squalid accommodation’. “Construction companies and the Qatari authorities alike are failing migrant workers,” Salil Shetty, secretary-general of Amnesty International had said at the time. “Employers have displayed an appalling disregard for the basic human rights of migrant workers. Many are taking advantage of a permissive environment and lax enforcement of labour protections to exploit construction workers.”

Globally, the viability and applicability of sustainable lifestyles has been found to largely depend on the end-users of the country’s infrastructure, but consumer trends and habits may be difficult to pin down in Qatar given the assorted mix that makes up its population. Harrigan, speaking about resourceconservation at the conference in December 2013 had pointed out the challenges such a situation poses for Qatari authorities. “Today’s population is heavily tilted towards lesser skilled expat workers,” Harrigan said. “The demand for services they are placing is quite different from the demand that would be placed in future by a larger Qatari population and population of expats with high human capital content, with more women and children,” he continued. Harrigan’s prediction of future population composition seems to rely on the assumption that the number migrant workers in Qatar will drop following the world cup. However, the absence of social sustainability regulations to govern and ensure these labourers are sent back to their countries of origin, could detriment

to Qatar’s attractiveness to expats who could be potential residents of the country. Inviting and accommodating this population should ideally be a top priority for the country’s officials, as should be the facilitation of required services for them, such as schools, hospitals and so on. “With the FIFA World Cup in line, there will definitely be an increase in the number of people visiting the country,” says Achan. “Additionally, there will also be an influx of expats who may choose to reside in Qatar due to their employment roles with construction companies operating in the region, such as foreign contractors and consultants. The logistics to accommodate these numbers, such as residential complexes, welfare institutions, schools and so on is a definite need in the market. “To that effect, a critical part of the country’s national vision is to increase the total number of schools in Qatar,” continues Achan, alluding to the efforts undertaken by state body Qatar Foundation. Education is finding amplified significance in Qatar’s construction plans, owing largely, one might assume, to the

population rise of both, nationals and expats in the country – according to reports by local news agency Doha News, Ashghal had, in July 2013, promised to complete the construction of 44 new educational units by the end of 2014, and the Qatari annual budget for 2014–2015 accounts for the construction of 85 new schools. “The country is doing a good job of recognising and correcting its shortages,” Achan adds. Qatar looks to be in maintenance mode. To begin with, the country has to swiftly repair the reputation of its legislative and judicial bodies, which, critics have stated, do not fulfil the promises they have made to the migrants they welcome to construct their habitat. Furthermore, the country has to rein in the inherent factors that impact a market’s economy and industries, most significant of these being rising prices. Qatar has to ensure it addresses all these concerns – and any others that may crop up in due time – within the eight-year short deadline it has to build stadiums, roads, rail networks, residential units, commercial units and – most crucially – a secure labour market for an event the world will be watching.

MIDDLE EAST

“THERE IS HUGE POTENTIAL FOR GROWTH IN THE COUNTRY, AND IT IS AN EXCITING TIME FOR NEW OR FOREIGN COMPANIES WISHING TO ENTER AND COMPETE IN THE MARKET”

MAY 2014

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SPECIAL FEATURE GREEN SOLUTIONS

BIGPROJECTME.COM

MIDDLE EAST

MASDAR CITY The multi-billion dollar project aims to be the standard for sustainable construction in the region.

MAY 2014

SPECIAL FEATURE GREEN SOLUTIONS

PAYING FOR SUSTAINABILITY

With the UAE construction sector migrating towards sustainable practices, Big Project ME investigates how the UAE’s green economy can be funded for the future

BEFORE YOU DESIGN... CHRIS WAN, DESIGN MANAGER AT MASDAR CITY “Three things are important before designing for a project actually begins; Firstly, get your brief sorted out and bought off by all shareholders. Next, work out a business plan so you understand your budgets and parameters and can design accordingly. Finally, set targets and goals for environmental performance before you start designing. Once you have done this, ensure you stick to the design and do not make frequent amendments and changes – it is the worst thing you can do to a designer who is halfway through his building drawings! We operate in a real world with actual time deadlines and cost constraints to deal with, and even a single change in the design can lead to fluctuations in the entire project’s delivery timeline. Implementation of discipline, from start to finish, is critical to ensure the project does not stagnate or get delayed. Working with a cost consultant is ideal in such scenarios, especially since they can estimate how much a building will cost if constructed without any sustainability targets – use that budget, and circulate it around your design team as the real budget. With the Siemens project, we had a cost consultant as part of the decision-making team, who worked with the designers over details such as choice of glass, material, fixtures and other such factors, because it all matters when pricing is concerned. The cost of the project was very closely monitored at all stages, such as concept creation, schematic design, detailed design, construction documentation, pretendering estimates and so on.

relatively tighter cash flows – arrives at an affordable version of green building practices. “At Masdar City, we stick to the main core definition of sustainability as revolving around the three pillars of economic, environmental and social sustenance,” Chris Wan, design manager for Masdar City tells Big Project ME. “We’re very clear when using that model for our projects and developments,” he asserts. “If something isn’t economically sustainable, then by our definition, it isn’t sustainable enough. In that context, questioning the justifiability of the premium on sustainability is, in a way, a potential contradiction, because it seeks to treat costs as outside of the sphere. We instead view them as a part and parcel of integrated sustainability.” Nonetheless, apprehension regarding the cost of ‘going green’ persists in the UAE construction industry, pockets of which, when observed closely, are found to struggle against their more-resourceful competitors. “The most common concern about sustainability remains the premium it is implemented at,” explains Wan. “But through a series of studies, lessons learnt and interaction with the industry, we’ve reached the conclusion that perhaps, the premium isn’t the real concern after all. “The question is regarding what approach is best suited for a given economic model – how environmental sustainability can be made commercially viable for a project operating within the given economical, budgetary or financial setups should be probed. When you ask the question that way, it ensures that irrespective of the project result, it will work within the economic setup it is meant to,” Wan adds. The impact of a green industry, it would seem, varies greatly based on the flow of resourcetransfer it operates with, and the typical top-down approach is often preferred for the governmental endorsement it offers. Nevertheless, global green

MAY 2014

MIDDLE EAST

“

We are home to the Mohammed Bin Rashid Solar Park, IRENA Headquarters and Masdar City in the UAE. Here, we actually do what we have promised, and sustainability is more than just a PR exercise.” This remark by HE Reem Al Hashimi, managing director for the Dubai World Expo 2020 Committee, is a succinct reminder of the sustainability targets that are fastbecoming the new driving force for various sectors and industries in the UAE. Government policies and strategies to encourage sustainability have paved the way for investment in the clean technologies sector. According to a report released by Dubai FDI, the foreign investment wing of the Department for Economic Development (DED), the Dubai Supreme Council of Energy (DSCE)’s Integrated Energy Strategy is expected to bring a 30% reduction in carbon emissions by 2030, and the Mohammed Bin Rashid Solar Park is expected to produce 1,000MW of energy once all its phases achieve full completion in the same year. The value of building green is slowly being recognised in the country’s construction market. This is best evidenced by the recurrence of sustainability-driven discussions at major construction events across the country, such as the World Green Economy Summit, Cityscape and The Big 5 Shows. While costcutting remains the obvious benefit of green construction, the deeper concern, regarding fund procurement for sustainability-driven targets, persists in the UAE construction market. Various legislative and financial measures to regulate business transactions have been implemented since the market crash of 2009. They do well to guard the local property and construction markets against an encore, but the promotion of sustainability requires that the construction industry – now building through

SPECIAL FEATURE GREEN SOLUTIONS

5 MINUTES WITH JENS NIELSEN, PARTNER, WORLD CLIMATE Globally, what are the requirements for creating green economies? For a greener world to happen, we simply need to work together as partners. Change today will not happen unless you involve the nation states that make the regulation; the regions, cities and utilities that implement and run our infrastructure and facilities; the private sector that provides the technology and the know-how for new projects and innovation; the finance sector that has the funding to scale initiatives so they become impactful; and the consumer and the citizen whom we all in the end are accountable to. What are the hurdles associated with the acceptance of green economies? There is a commercial uncertainty associated with green talk, especially when people say green growth is good growth. Rather than a ‘do-not’ approach, we need a positive one that promotes innovation and self-improvisation – there needs to be a bigger acceptance of what the starting point for each entity looking to go green is. Is it ideal to drive sustainability targets through government efforts? You want growth, but not all growth is green. It’s very hard to take some of the fast-expanding countries in the world, like China, Indonesia or South Africa and tell them to, say, build green – with populations who don’t even have access to housing, green housing becomes an illogical demand placed on them. Growth by itself comes before green growth, so to pursue it in a top-down governmental way is quite challenging.

MIDDLE EAST

How can the private sector encourage sustainability? Big companies have the appeal to take the lead, besides just through regulating their supply chains, in terms of financing green projects. There’s a lot of inertia in the market because it’s been outside our normal way of looking at things; that is why, big companies have to show and lead the way. Generally, shortsightedness and competition make it difficult to separate profiteering from business operations. Nevertheless, there needs to be a stronger push towards foresightedness, and this is what the UN has been trying to work on too.

MAY 2014

BIGPROJECTME.COM

building councils have consistently proven that cohesion between local corporations can also lead to the establishment – and achievement – of improved industry standards. Saeed Alabbar, chairman of the Emirates Green Building Council (EmiratesGBC) is of the view that sustainability in the UAE is driven by both, the public and private sector. “There’s two sides to it,” he tells Big Project ME. “Government regulations are definitely stimulating sustainable real estate development,” he says, alluding to the Dubai Municipality’s Green Building Code and Abu Dhabi Urban Planning Council’s Estidama. “However, developers are implementing sustainability out of their own choice too. They see the added value it offers them, and more importantly, they have begun to understand that sustainability does not come at an additional cost. The understanding that green construction does not require special funding or financing is a gradual one,” Alabbar continues. Both Wan and Alabbar, as design experts who specialise in the field of energy-efficiency, are in agreement over a crucial factor pertaining to sustainability – going down the green route requires intelligent design strategies rather than expensive technology. “We are often asked about the affordable technologies or methods we employed in the (recently-launched) Siemens building to achieve the remarkable statistics and results we did,” says Wan. “Our principle with the project was to concentrate on the passive design of the building, and that includes designing a building which doesn’t rely on advanced technology to be sustainable,” he says. “Therefore, we used basic components, such as solar energy, wind power, good shading, appropriate orientations and openings, correct ratio of glass to solid and so on to ensure there is appropriate optimisation of the simpler techniques,” continues Wan. “After running these designs through energymodeling tests, we moved to technology-addition, which by then, was a minimal cost in the bigger picture. To get the building functioning at its best in its environment, in a nutshell, depends on the science of the energy component.”

Alabbar provides a further detailed insight into the energy-efficiency of the construction market, stating new projects are already built with the right amount of diligence to ensure technology enhancements are kept to their lowest requirement. “The need for funding could possibly intensify when the energy-efficiency of existing buildings has to be improved, since processes such as retrofitting involve sufficient investments,” Alabbar explains. “A certain amount is definitely required to kick-start the retrofitting project, but funds for those are sourced from either the developer undertaking the process, or an external company the project may have been outsourced to. “The investors are remunerated from the savings generated by the implementation of the retrofit,” continues Alabbar, “and funding for existing buildings is quickly gaining popularity in the UAE through the establishment of sophisticated bodies for the same, such as Etihad Energy Services (Etihad Esco) in Dubai.” Clearly, the UAE seems to have found a balanced mélange of public and private sector investments to drive the country’s sustainability targets for both, the Expo 2020 and its Vision 2030 plan. The influx of international construction companies has buoyed the sustainabilityquotient of the UAE’s private sector, and Alabbar intends to further incorporate the country’s SMEs into the industry’s green movement. Remarkably, the chairman of the Emirates Green Building Council is confident that the private sector will sustain its transition towards greener operations, with or without any potential subsidies from the federal government. “As an industry, we shouldn’t be looking to subsidies as something we absolutely need,” Alabbar opines. “Sustainable products and techniques will develop according to the market demand for them, and we shouldn’t be advocating to subsidise elements – such as eco-friendly products or retrofitting – when we can instead promote them. “Eventually, a proposed green technology or product will not only survive, but also thrive in the market if it is economically sustainable,” Alabbar predicts confidently.

“IF SOMETHING ISN’T ECONOMICALLY SUSTAINABLE, THEN BY OUR DEFINITION, IT ISN’T SUSTAINABLE ENOUGH”

SPECIAL FEATURE GREEN CONTRACTORS

BIGPROJECTME.COM

CAN CONTRACTORS BUILD GREEN?

MIDDLE EAST

As the UAE construction market strives to improve its sustainability quotient, Big Project ME examines how contractors can contribute to a green project

MAY 2014

SPECIAL FEATURE GREEN CONTRACTORS

Other variables, such as product price, also impact costs. If the project manager or client insists a particular product be utilised in the project, then the contractor is likely to be affected by this.” Willis is not alone in his belief that sustainability results and returns from a project are largely the result of joint efforts. Bjorn Viedge, commercial manager of Alemco Dubai echoes the need for responsibility-sharing where sustainability is concerned. “As subcontractors,” Viedge explains, “we find that the challenge with green contracting is that in nine out of every 10 projects, the sustainability focus is generated by the client team, comprising of architects, consultants, or other such parties. “Contractors at any level follow a specific set of rules, which in a document, include the specifications and set of drawings for the structure. A developer will usually sit with his own design team, architects, consultants and so on while deciding to create a sustainable structure. “At a very early stage in the construction lifecycle, this client team decides to make the project ‘green’,” Viedge continues. Often, such decisions taken early on by client teams impact contractors at a later stage, when the real building activities have to be sourced, accounted for, commenced and appropriately completed in accordance with specified standards. “Let’s say I construct two buildings with the identical designs and methods, except one is driven by green initiatives and the other isn’t. Chances are good that the latter will be far cheaper, even if viewed purely from the MEP perspective, because the scope for operations in this structure will eliminate the need to source sustainable building materials,” Viedge explains. Broadly viewed, it would appear contractors are in a position to enhance a project’s sustainability quotient in more ways than one – while intelligent practices employed on-site, such as waste-elimination or improved safety measures can minimise the potential adverse effects of construction, it is the more intrinsic procurement process – which contractors both, control and operate – that may increase the overall sustainability value of a given construction market. “The concern regarding sustainable construction in the UAE and GCC markets is the lack of a solid green supply chain,” Willis rues. “The building materials required to promote and enhance sustainability are likely to be imported, and importing them increases costs over locallyproduced cheaper, but less sustainable products. “The contractor may be inclined to use a more sustainable or environment-friendly building

MAY 2014

MIDDLE EAST

n a landmark move, Saudi Arabia plans to convert at least 90,000 mosques across the Kingdom into environment-friendly structures, paving the way for sustainable products and techniques into its construction market. Faisal Al-Fadl, the secretary-general of the Saudi Green Building Forum has said that he believes green building practices can reduce electricity consumption in mosques by up to 80%. He adds that when these practices are coupled with the deployment of appropriate filtration systems, projects can reduce the consumption of water and carbon emissions by 30-40% each. This development follows the announcement of significant construction progress on what is being termed as the first ever eco-friendly mosque in Dubai. Additionally, development has been reported on various sustainabilitydriven projects across the emirate, such as the Silicon Park project in Dubai Silicon Oasis, and Sustainable City development in Dubailand. Crucial to achieving the sustainability targets set by the developers of these projects will be the contractors involved in their construction. In their role as on-site decision-makers, contractors can decisively enhance – or debase – the eventual ‘green’ quotient of a project. “Contractors have control of the construction process,” says Jeff Willis, associate director for Arup, based out of Dubai. “If they (contractors) don’t build appropriately, with the right equipment or with the right practices, the quality of the end product will suffer. “This can also happen if the contractor uses unsustainable products or practices to reduce construction costs, whether by his own will or the client’s,” Willis continues. “It is therefore critical that the contractor implements the given standards to provide the quality required – in both tools and techniques – for sustainable project delivery to occur.” Willis’ views are a reminder that contractor practices cannot be viewed as completely independent of client or consultant decisions. Traditional or modern, the hierarchy of an ideal construction process begins with the developer, whose extent of involvement – through consultant teams, budgets, deadlines and so on – often impacts contractor operations. “Everybody involved in the project faces their own set of deadlines,” explains Willis. “Generally, parties working closely with the client can considerably impact the construction process. “The involvement of the client largely dictates how the project moves, but all timelines and schedules have to be achievable and realistic.

SPECIAL FEATURE GREEN CONTRACTORS

BIGPROJECTME.COM

EXPERT OPINIONS Big Project ME asks the sustainability experts for their views on the sustainability market in the UAE

WHY WASTE? “My interpretation of sustainability is to reduce the human impact on an environment, and even simple on-site measures, such as reducing waste and water consumption go a long way in ensuring it is followed. Very often, products are shipped in from other countries, and contractors are in a good position to recycle the paper or wooden packaging these products arrive in. These day-to-day measures ensure minimal wastage occurs on-site.” Bjorn Viedge, commercial manager, Alemco Dubai

SUPPLIER SPEAKS “The problem with many of the region’s contractors is not only the lack of complete environmental consciousness, but also a total deviation towards price consciousness – however, this is driven by their employers, such as clients, developers, builders, owners and so on. These are the people we need to target as a green supplier. Most contractors have very little choice due to the limited budgets they have to complete their work within. It is a real shame that budgets on windows, doors and so on are often the first to be slashed when project costs overrun. Most projects overrun in costs of both time and money, and project managers along with their contractors are forced to make savings. They all mean well, but the original goal of ‘green’ building is one of the first things to suffer in order to save money.” Guy Dawson, general manager, Origin Dubai

ALL ABOUT THE ATTITUDE

MIDDLE EAST

“The success or failure of a project, and its sustainability objectives, depends greatly on that all project parties cooperate and buy-into outcomes to be achieved. A contractor is the direct interface with the supplier market. It is therefore critical to engage the contractors in the debate about sustainability. Attitudes are a big part of embracing the change which comes with sustainability. Contractors who decided to embrace sustainability have found ways to deliver on sustainability targets easily and cost effectively, and they now do this with pleasure. No party involved in the construction process can individually bring sustainability to the board, and it is critical to ensure contractors – with their knowledge of easy and cost-effective products and techniques – are thus involved in important sustainability decisions.” Huda Shaka, associate, Arup Dubai

MAY 2014

LEGISLATIVE PROMISE Sustainability experts say that the government legislation for sustainability will drive the market forwards.

element for his project, but if his budget does not permit him that leeway, then there are not many options he is left with in that scenario,” Willis explains. He is, nonetheless, optimistic about the UAE’s supply market – one that is the product of a fallen market resurrecting with better foundations, credited largely to the government regulations and legislations that drive it. “These legislations also drive contractors towards seeking out sustainable building materials for their projects. The market supply for green products can only sustain and thrive if an efficient and solid chain for them is created.” While Willis’ observations may convince one of the seemingly marginal influence contractors can have on the supply chain, Viedge believes there is more a contracting firm can do to ensure supply chains are steered towards economically and environmentally sustainable practices. “In a way, it may be said contractors drive the supply chain,” Viedge clarifies. “However, a corresponding argument is that sustainable products do exist in the market, but to competitively price them is the challenge. As contractors, then, it is in our capacity to engage with the supply chain and make for sustainable products to make their way into the market at affordable rates. Should they reach optimal levels of pricing, the market will deviate towards using them – but if they are more expensive than the typical existing products, it is natural tendency to go for the cost-effective solution. “If as a contractor, I won a tender and offered the developer a ‘green’ alternative to the existing product, irrespective of what his stand on sustainable construction is, his first question

would be regarding the price of the new option,” Viedge theorises. “If there is no – or a negligible – difference in the price, the developer is likely to at least consider the sustainable option. However, if the cost of the green product is almost twice the original, he will almost certainly shoot it down!” Clearly, the case for sustainable contracting includes more than just building practices. Sustainability targets require that clients accommodate sufficient budgets to not only justify their decision to go green, but also provide contractors with satisfactory resources. “For contractors at any level, there are certainly elements which affect sustainability and are out of our control,” explains Viedge, “but there are equally other such elements which are within our control and should be optimised accordingly.”

“CONTRACTORS HAVE CONTROL OF THE CONSTRUCTION PROCESS. IF THEY DON’T BUILD APPROPRIATELY, WITH THE RIGHT EQUIPMENT OR WITH THE RIGHT PRACTICES, THE QUALITY OF THE END PRODUCT WILL SUFFER”

FOCUS MEP

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MIDDLE EAST

AHEAD OF THE GAME MEP contractors have been keen proponents of green building techniques long before the new green building codes were released.

MAY 2014

FOCUS MEP

ON A LEARNING CURVE

Big Project ME speaks to leading MEP contractors to find out how the industry is ready to push forward with renewed impetus thanks to the introduction of the green building codes introduce the green building regulations, confident in their ability to meet up to the standards required. Despite this optimism, there remains a few concerns that must be addressed before any true progress is made, these experts tell Big Project Middle East. “The biggest issue for us is to deal with unqualified MEP contractors in the market,” says Burak Kizilhan, board member at AE Arma Elektropanç, a Turkish MEP giant operating on projects throughout the GCC. “They drop the prices surprisingly low and sometimes there are companies who signed the projects with our dry cost. This kind of competition is making life very difficult for MEP contractors,” he explains further. Masood Raza, the general manager of Jumbo Engineering, is quick to agree with Kizilhan, expressing his concerns about how this could impact the implementation of the green building codes for MEP. “Because of the green building regulations, where you have to comply with Estidama, you’re often competing with other parties who don’t even know what Estidama is all about. So in that case, you’re done. You don’t know where the prices are going.”

“THE FACT IS THAT MEP COMES LAST IN THE CYCLE OF THE PROJECT. IT’S THE LAST TO BE AWARDED, BUT THE EXPECTATIONS ARE VERY HIGH FOR THAT”

However, Nathan Hanns, the general manager of ALEMCO, the MEP arm of ALEC, says that it’s not all doom and gloom. He points out that every industry has its issues, but it’s up to the industry to be positive and drive change through as it ultimately benefits everyone involved. “Every industry has its problems and it is easy to be judgemental. I personally believe the best method for ensuring that sustainable practices are put in place is through governance and ensuring that the construction regulations are in place. The better the governance, the better the end product, as simple as that.” “A major risk for subcontractors, as a business, is going to be the growth in the GCC region. With the growth that is forecasted for 2020 and 2022 occurring in various regions within the GCC, there is going to be a shortfall of skilled resources. The key to our success is our resources. I think over the next two to three years, it’s going to be demanding for companies to get the skills and resources that they require.” With this in mind, there are a number of methods to address the challenges that loom ahead. While Raza firmly believes that education will benefit all parties, he does concede that things have become a little more complex. “Definitely, we need more education at all levels, but I think that will grow now because both the major emirates have got existing and very clear regulations. Things will definitely improve, I’m very positive about that. Education is very important, investors need to know that you have to be sustainable while you’re constructing different projects,” he asserts to Big Project ME during a telephone interview. “(But) what we’re seeing now is that the challenges are going to increase. There’s going to be more design challenges and the job of MEP contractors will become quite critical. Things

MAY 2014

MIDDLE EAST

t the start of this year, Dubai Municipality made the announcement that a set of new green building regulations would be made mandatory for construction projects in the emirate. This announcement followed a successful test phase – which began in 2010 – that saw 40 government buildings successfully implement the new law prior to it being rolled out across Dubai. Although HE Engineer Abdulla Moahmmed Rafia, assistant director general and chairman of the sustainability committee, has expressed his satisfaction at the positive reaction to the green building codes, there has been some consternation amongst contractors in the construction industry. Unfortunately, despite ample warnings, a number of contractors have simply been unprepared for what the regulations demand of them and their capabilities. As a result there has been a significant underswell of reaction as the laggards scramble to get up to speed. However, one sector of construction contractors has not been caught so unawares. In fact, it could be argued that they were ahead of the curve, and that they were simply waiting for the rest of the industry to catch up with them. This sector is of course, the MEP industry. Although it rarely receives the recognition it deserves, the Mechanical, Electrical and Plumbing sector has always been at the forefront of sustainability efforts. Perhaps this is a consequence of the environment it works in. With water resources in the GCC already scarce, MEP contractors have always looked to be proactive with the systems they install to help maximise performance and minimise wastage. To this end, they looked to the West, where sustainability measures have long since been embraced. As such, the top level MEP contractors in the region welcomed the moves by the Dubai Municipality and the Abu Dhabi government to

FOCUS MEP

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QUALITY CONTROL Unqualified contractors is a major bugbear for MEP contractors operating in the region.

have changed and consultants have started taking on board all the requirements and being very specific about what they want. So it’s going to be very challenging for contractors to price things, if you’re not aware of what you have to do.” Following on from that train of thought, Burak Kizilhan says that he expects Expo 2020 and the 2022 FIFA World Cup to have an enormous impact on the construction market in the region, which will in turn bring bigger challenges to the MEP industry. “The importance of qualified MEP contractors is now vital in order to meet the project deadline and keep the client happy. In addition to that, the proportion of MEP works is getting increased as the magnitude of the construction projects is so big. That is the reason why the pressure on MEP contractors is higher than usual,” he warns. Given the increase in pressure that both Kizilhan and Raza warn of, perhaps more can be done to address the situation MEP contractors find themselves facing? Nathan Hanns certainly thinks so, as he explains further. “You have to look at the methods of how MEP contractors are generally appointed on projects. The consultants will develop the design based on a concept design. The governance will determine the benchmarks and then clients will adapt the benchmarks either in line with the governance or higher to suit their end product requirements.” “So when we tender for a project, we could be tendering with the governance in place, as well as any additional project sustainability

targets. The tender will then go to the open market. The open market conditions have been quite severe over the last three to four years and there has been a lot of price cutting and value engineering,” Hanns elaborates. “When the subcontractor is finally appointed, the governance still remains. So the pressure is on the subcontractor to make sure that the systems conform to the governance and to design that has been specified in the contract. So I’d say that yes, the pressure is there, but the budgets are not necessarily there.” “I think the government codes enforce a certain level, but the developer or client are selecting the type and ratings of their buildings which will determine the systems that we eventually install into a building. The design is carried out in line with the developer or client selection process. We are then at the end stage of the construction process.” “We can only control the selection of the equipment and the materials as well as where we source the materials from and how we construct it and set it into operation. What we’ve seen in the past is not necessarily the focus of the end-user. The building design and systems are sometimes more cost driven rather than efficiency driven. The intention can also be diluted through the tender process and through the tender negotiation which will affect the final product.” “There is a change in the market towards more efficient buildings, but better change

CULTURAL CONTRACT Drake & Scull Kuwait (DSI Kuwait), a subsidiary of Drake & Scull International PJSC (DSI), has won a major engineering contract worth $18.5 million for Sheikh Jaber Al Ahmad Cultural Center in Kuwait City. The company further revealed that it has also bagged an MEP deal worth Dhs60m for a healthcare facility in Shuwaikh and two commercial developments in Al-Qebla. Under the terms of the first agreement, DSI Kuwait will undertake supply, installation, testing and commissioning of plumbing and fire fighting works, including defect liability to be completed by October 2015. Located near Al Salam Palace in the heart of the Kuwait City, the Sheikh Jaber Al Ahmad Cultural Center will be a major landmark, reflecting the evolution of Kuwaiti cultural and heritage landscape. It would be equipped with state-of-the-art facilities required to organise a wide range of cultural activities. DSI Kuwait will also carry out the MEP works for two commercial developments in Al-Qebla area of Kuwait. The scope of work includes renovation and maintenance along with replacement of chillers, electric main panels and boards. Both developments are already under progress and will be delivered by June 2015. The company has also bagged an MEP contract for a healthcare facility in Shuwaikh.

MIDDLE EAST

“I THINK OVER THE NEXT TWO TO THREE YEARS, IT’S GOING TO BE DEMANDING FOR COMPANIES TO GET THE SKILLS AND RESOURCES THAT THEY REQUIRE”

MAY 2014

The scope of the project involves heating ventilating and air conditioning (HVAC) along with plumbing and firefighting works. The work for this healthcare facility is already in advance stages and will be handed over by March 2015.

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FOCUS MEP

can be produced in the market by governance. At the end of the day, governance changes what we do,” Hanns asserts strongly. This is an area where Masood Raza says he’s in complete agreement, pointing out that there are often unreasonable expectations facing MEP contractors, given that they’re involved late in the project construction lifecycle. “We have identified two or three things actually that are very interesting. The fact is that MEP comes last in the cycle of the project. It’s the last to be awarded, but the expectations are very high for that.” “Not only are they very high, but you have to finish it before they handover the building for inspection. So we face this challenge almost every day as an MEP contractor. You’re the last on board and you have to finish the first. Sometimes it’s very difficult to spend more time in design and planning, which is, in my opinion, the best thing (to do). That is where the project either wins or fails.” “Inherently, being an MEP contractor is a very high pressure business. But I still feel that in addition, there’s always pressure from investors because they want to beat the inflated prices, so they want everything to finish tomorrow, because they want to finish the project faster. “As a result they spend less time on designing and planning and so that partially designed project comes to the MEP contractor, and they have to fill in the gaps almost everywhere and that becomes more challenging to us,” he muses. So what lies ahead for the MEP industry, given the challenges that have been outlined? While all three experts are generally positive about their outlooks for the industry, they do say that greater inroads could be made, particularly in the development and adoption of new technology. “Well I think there’s different governances that

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PRESSURE IS ON Burak Kizilhan says that as the magnitude of projects increase, so does the pressure on MEP contractors.

“THE IMPORTANCE OF QUALIFIED MEP CONTRACTORS IS NOW VITAL IN ORDER TO MEET THE PROJECT DEADLINE AND KEEP THE CLIENT HAPPY”

are coming out that are affecting us in different ways,” says Hanns. “In Dubai we are focused on the Etihad and ESCO sector of works, which is a great initiative based on the refurbishment and upgrade of existing facilities to obtain energy savings. We can see the benefits of that.” “There are a lot of buildings in the UAE that have been built within the last ten years. The majority of these buildings have been constructed with the new building codes and have relatively advanced building systems, however the older buildings are outdated and the energy efficiencies of the buildings can be easily increased. So that’s something new we have to focus on,” he points out. “Some of the projects that we operate on are refurbishment-based which includes the upgrading of building systems and facilities and changing to more efficient installations. We see a lot of drive in the market in this direction and there is a lot of opportunity for increased efficiency by end-users.” Masood Raza adds that with the new green building codes, there will be new development in areas like VRV and VRF systems, while fresh air treatment will increase – with the focus on proper recirculation and heat recovery. “We see that intelligent and LED lighting systems will be used more and more. There’ll be recycling units coming into play. We’re already looking at grey water treatment systems for some of our buildings,” he explains. “There’ll be intelligent control systems and there’ll be new innovations coming through. It’s a very exciting period of construction business.” “We’ve been very lucky with companies like DEWA and Dubai Municipality affiliated companies. All of them are government run bodies that enforce green technology. So I would say that if we’re not ahead, we’re on the learning curve.”

REDEVELOPMENT WORKS Drake and Scull International has signed a $29.9 million contract for the complete MEP works for the redevelopment of the Mall of the Emirates.

a sports and leisure precinct. Furthermore, the mall’s cinemas will be expanded, while ‘unique dining concepts’ will also be developed, a statement said.

Awarded by Khansaheb Civil Engineering LLC, the main contractor on the project, the contract will see DSI procure, install, test and commission all the MEP works within the shopping mall, the refurbishment of which is expected to be completed by 2015.

Work on the project will be undertaken in phases, with work on Phase I already underway.

Located off Dubai’s Sheikh Zayed Road, the Mall of the Emirates has begun a multi-stage redevelopment programme which is estimated to cost $272.2 million.

MIDDLE EAST

The redevelopment projects for Mall of the Emirates will include a new fashion district, luxury retail and

MAY 2014

“DSI is well established in the UAE as market leaders in the Engineering business and we will continue our efforts to help shape Dubai and the UAE’s skyline. “With our expertise in MEP works and General Contracting, cutting edge technologies and vast resources, DSI is well-positioned to undertake significant construction and infrastructure projects as Dubai gears up to host the 2020 World Expo,” said

Khaldoon Tabari, CEO and vice-chairman of the regional MEP contractor. Over the last year, the company has been awarded a number of high profile projects across the UAE, with the latest being a $109.7 million joint venture agreement between DSI and Habtoor Leighton Specon to provide MEP works for the Al Habtoor City in Dubai. In the fourth quarter of 2013, the contractor respectively won a $112.98 million contract and a $63.43 million contract to complete MEP works at the massive Louvre Museum Abu Dhabi project on Saadiyat Island and on the Fairmont Hotel project in Abu Dhabi.

COMMENT BENTLEY SYSTEMS

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NEVILLE GLANVILLE

BIM – Business Enabler or Technology Red Herring? Bentley Systems' Neville Glanville explains why it is so important for BIM providers to create systems that will push forward the concepts of simple and effective cooperation between all stakeholders involved in a project

MIDDLE EAST

"BIM IS ULTIMATELY ABOUT CREATING AN ASSET MODEL FROM DAY ONE THAT CAN BE USED CONSISTENTLY THROUGHOUT THE PROJECT TO DRIVE EFFICIENCIES AND IMPROVE COLLABORATION"

MAY 2014

he UK government’s decision to require that all suppliers involved in public sector construction projects use Building Information Modelling (BIM) tools and techniques by 2016 is to be applauded. The intention is to drive better value from capital investment and realise a 20% reduction in lifetime costs, whilst supporting environmental commitments by facilitating a more integrated approach to design. It is also about changing the culture between the client and the rest of the supply chain, replacing the traditional, rather adversarial business practices with a collaborative approach that should also drive innovation. However, misinformation is rife. BIM is not just about 3D data but about creating a holistic information resource that also includes 2D data sources, documents, spreadsheets, and more. I believe the key to realising the government’s BIM vision is to create simple, effective cooperation among the design, construction and operation aspects of the infrastructure lifecycle. Overcoming these traditional silos provides a chance to reduce duplication, minimise errors, streamline processes and facilitate collaboration. However, while the majority of new bids now demand some level of BIM compliance, requirements are often opaque at best. Let’s set the record straight: BIM, when done correctly, is about information sharing enabled by information mobility (across engineering disciplines and the infrastructure lifecycle). It provides contractors and owner operators with access to key design data that can be used to transform effectiveness throughout the construction and operations processes. Yes, it drives better use of 3D across the industry, but not only 3D. 2D data remains important, as does information held in documents,

KEEPING THINGS CLEAR BIM is not just about 3D data, but also about creating a 'holistic information resource' for the entire project.

COMMENT BENTLEY SYSTEMS

and construction information that can later be used to help drive cost-effective operations decision making and renovations work. Leveraging a collaborative platform and technology to share and integrate information, within an incremental approach that accommodates all of the specialised design simulation and analysis software best suited for each project role, will best enable the industry to achieve the desired widespread adoption of BIM. The governmentâ&#x20AC;&#x2122;s stance on BIM is to be commended. Demanding Level 2 compliance by 2016 is pragmatic and achievable and promotes the very real promise of intelligent infrastructure that is better performing in

terms of its energy efficiency, resilience to natural and man-made disasters, safety, and cost-efficiency. However, while industry adoption and interest are positive, it is essential that organisations take a step back and truly assess information requirements. BIM is a business process not a technology. With the right workflow and processes defined, BIM enables organisations to improve the quality of building design, reduce costs and achieve the collaborative workflows required to drive true innovation. n Neville Glanville is industry sales director, Bentley Systems.

MAY 2014

MIDDLE EAST

spreadsheets, and other databases, all of which contribute to a holistic BIM approach. BIM is ultimately about creating an asset model from day one that can be used consistently throughout the project to drive efficiencies and improve collaboration. Indeed, BIM also encompasses information management as much as information modelling. It enables a contractor to feed design information into project planning tools and resolve potential conflicts before arriving on site. It also empowers the sharing of space information with facilities management teams before the building goes live to drive effective up-front planning, as well as the sharing of other crucial design, engineering,

COMMENT FAITHFUL + GOULD

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DONAL O’LEARY

Buyer’s market Business is booming for UAE shopping malls, with retail one of the fastest growing sectors in the Middle East, remaining buoyant during the global downturn and with plenty of scope for future activity

s the GCC region’s second largest sector, retail makes a major contribution to economic diversification and development. The retail culture has evolved from traditional outlets to today’s large shopping malls, hypermarkets and supermarkets, with an influx of premium and luxury brands to the region. Increased populations, urbanisation, indigenous and expatriate wealth, strong household consumption and a growing tourism sector continue to provide ideal conditions for growth.

MIDDLE EAST

“THIS IS NO LONGER THE PLACE FOR BARGAINS AND THE MARKET THEREFORE FOCUSES ON ITS LUXURY OFFERINGS AND LIFESTYLE POSITIONING”

MAY 2014

The UAE has led the way in this sector and the more mature markets like Dubai still have ample opportunity for neighbourhood malls and mini-malls. As the population grows further and new leisure attractions draw more tourists in, additional large-scale shopping is likely to develop. Abu Dhabi has traditionally lagged behind, with high spenders typically heading for Dubai for shopping trips, but this is now starting to change. Deerfields Town Square and The Galleria have opened in Abu Dhabi this year, with several more in the planning process, amounting to an estimated further 1 million sqm of retail space between 2013 and 2017. Saudi Arabia, Qatar and Kuwait are also buoyant. The arrival of international brands continues to drive diversity and intensify competition for space in the premier malls. This is no longer the place for bargains and the market therefore focuses on its luxury offerings and lifestyle positioning. In a region where the climate can limit outdoor entertainment, visiting the mall has become a recreational activity. The larger developments target broad lifestyle appeal, going beyond shopping to improve the total mall experience. They act as a social hub for families and friends, offering air-conditioned environments with food & beverage, cinemas, bowling, etc. These leisure and entertainment offers are core drivers of retail footfall and have become more competitive and ambitious, with the more innovative attractions ranging from skiing and aquariums to indoor sky diving and children’s educational play centres. In this competitive arena, developers differentiate on scale, quality, accessibility and the introduction of new brands to the locality. Anchor stores are especially important for the major shopping malls, as demonstrated by the recent arrival of both Bloomingdales and House of Fraser in the

COMMENT FAITHFUL + GOULD

INCREASED COMPETITION The arrival of international brands has increased competition in the GCC retail arena.

clients from the earliest speculative stages. Clients often need very early estimates where only a piece of land exists, and we are able to provide these together with ideas for the building, infrastructure and car-parking planning. We also work with tenants, managing enhancements to meet corporate global brand standards in smaller units as well as large department stores. We leverage buying efficiencies to lower overall costs and also review fit-out timescales, as even a week’s saving on a small store brings an earlier return on investment. Increasingly we support global clients in their multiple locations, including global brands like Nokia and RBS. We provide a full pre- and post-contract project and commercial management service,

for new land owners as well as experienced developers. Many clients ask us to help them verify their budgets in order to obtain funding and to calculate projected profits. We can also bring lease advisors on board. Our understanding of the sector is underpinned by solid benchmarking data which enables us to challenge and interrogate development plans, ensuring that our clients’ interests are protected and best value is achieved. Our track record includes a range of retail and mixed use developments throughout the region. n Donal O’Leary is the director of Commercial Services for Faithful + Gould Middle East. He is based in Dubai and can be reached on +971 4 405 9100 for further enquiries

MAY 2014

MIDDLE EAST

UAE capital of Abu Dhabi, the first international store for both of the retail giants. In more mature markets, a mall’s popularity decreases over time as new offers appear. Footfall lessens, tenant mix decreases and the mall typically slides into a secondary market position. We are now seeing a lot more refurbishments coming to market (in Dubai, for example), with owners often adding new leisure offers to revitalise their business proposition and recapture/retain their customers. Faithful + Gould has developed a hub of specialist expertise from our Dubai office, collaborating with our regional offices to work with clients in each country. Our strengths include an excellent understanding of the Middle East retail sector, which enables us to support

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POSTAL/ZIP CODE 282 PHONE (+968) 2685 1000 FAX (+968) 2685 1211 EMAIL info@orpic.om WEBSITE www.orpic.om DESCRIPTION Engineering, Procurement and Construction (EPC) contract to build a Petrochemicals Complex

PROJECT NATURAL GAS PIPELINE PROJECT - BADRA OIL FIELD BUDGET $150,000,000 PROJECT NUMBER MPP2914-IQ REGION Baghdad, Iraq CLIENT Gazprom Neft Badra B.V (Iraq) ADDRESS Al Waziriya District, Mahala 301, EMAIL info@gazpromneft-badra.com DESCRIPTION Engineering, Procurement and PROJECT BAHRAIN - SAUDI ARABIA RAILWAY LINE PROJECT BUDGET $5,000,000,000 PROJECT NUMBER MPP2768-B REGION Bahrain CLIENT Bahrain Government POSTAL/ZIP CODE 26060 PHONE (+973) 1774 1144 FAX (+973) 1774 0048 WEBSITE www.capital.gov.bh DESCRIPTION Construction of a 90KM-long

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BUDGET $4,300,000,000 PROJECT NUMBER MPP1409-K REGION Ahmadi, Kuwait CLIENT Kuwait Oil Company (KOC)

PROJECT KNOWLEDGE CENTER PROJECT - KING ABDUL AZIZ CITY FORSCIENCE & TECHNOLOGY BUDGET $135,000,000 PROJECT NUMBER ZPR1282-SA REGION Riyadh, Saudi Arabia CLIENT King Abdulaziz City for Science &

railway line linking Bahrain and Saudi Arabia STATUS New Tender

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Construction (EPC) contract to build an 18-inch, 105-kilometer-long natural gas pipeline PERIOD 2015 STATUS Current Project

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SHAMAL COMMUNITY PROJECT - JUMEIRAH VILLAGE CIRCLE

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PROJECT NUMBER ZPR1310-U TERRITORY Dubai

BUDGET $370,000,000 PROJECT NUMBER WPR209-U TERRITORY Dubai CLIENT Damac Properties ADDRESS 4th Floor, Al Moosa Tower II, Sheikh Zayed Road POSTAL/ZIP CODE 2195 PHONE (+971-4) 332 2005 FAX (+971-4) 332 1874 EMAIL info@damacgroup.com WEBSITE www.damacproperties.com DESCRIPTION Construction of a 30-storey twin tower featuring luxurious stud ios as well as one and two-bedroom serviced hotel apartments PERIOD 2016 STATUS New Tender MAIN CONSULTANT Al Turath Engineering Consultants (Dubai) DESIGN CONSULTANT Naga Architects, Designers & Planners FOUNDATIONS, ENABLING & PILING CONTRACTOR National Dewatering & Drainage Services Company LLC (Dubai) TENDER CATEGORIES Hotels, Prestige Buildings TENDER PRODUCTS High-rise Towers, Hotel Construction, Residential

CLIENT Lootah Real Estate Development (Dubai) ADDRESS Rashidiya POSTAL/ZIP CODE 10631 PHONE (+971-4) 285 8223 FAX (+971-4) 285 8899 EMAIL lbc@lootahgroup.com WEBSITE www.lootahgroup.com DESCRIPTION Development of a Residential Community PERIOD 2016 STATUS New Tender DESIGN CONSULTANT Arif & Bintoak Consulting Architects & Engineers TENDER CATEGORIES Construction & Contracting TENDER PRODUCTS Community Development, Villas Construction

AL AIN ROYAL HOSPITAL PROJECT

BUDGET $3,000,000 PROJECT NUMBER WPR160-U TERRITORY Al Ain CLIENT Department of Municipal Affairs - Al Ain Municipality

INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS

MIDDLE EAST

www.ccsgulf.com | Tel: +971 4 346 6456 | info@ccsgulf.com

MAY 2014

FOAMGLAS® Insulation

Flat Roof

(accessible to foot traffic)

Al-Masjid al-Haram or the Grand Mosque surrounds one of Islam’s holiest places, the Kaaba. It is located in the city of Mecca and is the largest mosque in the world. In 2011 Saudi Authorities launched work on a new historic $10.6-billion expansion, increasing its capacity to more than 2.5 million worshippers. The total area of the existing Haram Mosque is 356,000 m2 accommodating 770,000 worshippers. Moreover, other plans were included to expand the mataf (the circumambulation areas around the Holy Kaaba) and provide air-conditioning for all parts of the Grand Mosque. In 2007, the entire mosque was fitted with air conditioning so that worshipers could perform their prayers in comfort. More than 100,000 m2 of the new extension will have FOAMGLAS® boards on the roof to ensure an efficient use of the energy. The high compressive strength of the thermal insulation FOAMGLAS® will enable the use of the roof for the pilgrims and is at the same time the most durable insulation with zero degradation of the thermal performance over generations. FOAMGLAS® can never get wet due to the homogenous and close cell structure which is produced with more than 60% recycling glass.

Grand Mosque extension, Mecca, Saudi Arabia Architect Dar al Handasah Construction 2012, ongoing Application FOAMGLAS® FLOOR BOARD T4+, 50 mm, about 125,000 m2, loose laid as inverted roof Finish Marble tiles

Build-up 1 Corrugated steel decking 2 Reinforced concrete 3 Waterproofing membrane 4 FOAMGLAS® FLOORBOARD T4+, 50 mm

5 Separating layer 6 Cement-sand mortar bedding 7 Marble tiles, 40 mm. Flat Roof, accessible to foot traffic

7 6

5 4 3 2 1

High compressive strength for highest flexibility. Web: www.foamglas.ae Email: info@foamglas.ae Dubai office Tel: +9714 434 7140 Doha office Tel: +974 465 5360

TENDERS

ADDRESS Jimi District POSTAL/ZIP CODE 1003 PHONE (+971-3) 712 8000 FAX (+971-3) 712 8001 EMAIL info@am.ae WEBSITE www.am.abudhabi.ae DESCRIPTION Construction of a hospital with capacity of 75 beds PERIOD 28/02/2015 STATUS Current Project MAIN CONSULTANT Society Technology House Consultant (Abu Dhabi) MAIN ARCHITECT Society Technology House Consultant (Abu Dhabi) DESIGN CONSULTANT Society Technology House Consultant (Abu Dhabi)

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CLIENT Rufi Real Estate & Construction LLC (Dubai) ADDRESS Galadri Plaza, Baniyas Rd, Al Rigga, Deira Souq, Near Dubai Municipality POSTAL/ZIP CODE 112386 PHONE (+971-4) 224 7352 FAX (+971-4) 224 7362 EMAIL rufireal@emirates.net.ae WEBSITE www.rufiproperties.com DESCRIPTION Construction of residential and commercial building comprising a basement level, a ground floor, 3 parking levels, 20 additional typical floors and a helipad PERIOD 30/06/2015

MAIN CONSULTANT Dubai Architectural Research Team International - DARTIN (Dubai) MEP CONSULTANT Dubai Architectural Research Team International - DARTIN (Dubai) MAIN CONTRACTOR Cast Construction Company (Dubai) MEP CONTRACTOR Super Style Electromechanical Works LLC (Dubai) TENDER CATEGORIES Prestige Buildings TENDER PRODUCTS Commercial Buildings, High-rise Towers, Residential Buildings

STATUS Current Project

SPECIALIST CONSULTANT Society Technology House Consultant (Abu Dhabi) INTERIOR DESIGN CONSULTANT Society Technology House Consultant (Abu Dhabi) PLANNING CONSULTANT Society Technology House Consultant (Abu Dhabi) ENGINEERING CONSULTANT Society Technology House Consultant (Abu Dhabi) MAIN CONTRACTOR Cities Building Construction Establishment (Al Ain) TENDER CATEGORIES Medical & Healthcare, Construction & Contracting TENDER PRODUCTS Hospital Construction

QATAR KATARA TOWERS PROJECT LUSAIL MARINA DISTRICT

PROJECT NUMBER WPR059-Q TERRITORY Doha, Qatar CLIENT NAME Katara Hospitality (Qatar) ADDRESS Formerly Qatar National Hotels Company, Katara Hospitality Bldg, C Ring Road POSTAL/ZIP CODE 2977 PHONE (+974) 4423 7777 FAX (+974) 4427 0707 EMAIL info@katarahospitality.com WEBSITE www.katarahospitality.com DESCRIPTION Construction of Katara Towers comprising a luxurious five-star hotel and a luxury hotel, including branded apartments, consisting a total of 614 rooms PERIOD 2017 STATUS New Tender

KHALIFA STADIUM UPGRADE PROJECT

BUDGET $300,000,000 PROJECT NUMBER MPP2164-Q TERRITORY Doha, Qatar CLIENT NAME Aspire Academy for Sports Excellence (Qatar) CITY Doha PHONE (+974) 4413 6570 / 4413 6219 EMAIL info@aspire.qa WEBSITE www.aspire.qa DESCRIPTION Upgrading of an existing Stadium to increase seating capacity to 60,000 spectators from the current 45,000 PERIOD 2016

RUFI GOLF GREENS TOWER PROJECT DUBAI SPORTS CITY

BUDGET $26,000,000 PROJECT NUMBER WPR186-U TERRITORY Dubai

INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS

MIDDLE EAST

www.ccsgulf.com | Tel: +971 4 346 6456 | info@ccsgulf.com

MAY 2014

TENDERS

SAUDI ARABIA RABIGH CEMENT PLANT EXPANSION PROJECT

BUDGET $7,000,000,000 PROJECT NUMBER ZPR1312-SA TERRITORY Jeddah, Saudi Arabia CLIENT NAME Arabian Cement Company Ltd (Saudi Arabia) ADDRESS Kilometre 14, Medina Road POSTAL/ZIP CODE 275 PHONE (+966 (2) 6828270 / 6820431 / 6820461

STATUS Current Project MAIN CONSULTANT Dar Al Handasah Consultants (Shair & Partners) – Qatar MAIN CONTRACTOR Six Construct Ltd (Qatar) MAIN CONTRACTOR (2) Midmac Contracting Company (Qatar) TENDER CATEGORIES Construction & Contracting, Leisure & Entertainment TENDER PRODUCTS Sports Complexes

Petroleum Corporation (EGPC) ADDRESS Egyptian General Petroleum Corporation Bldg., Palestine Street, 4th Sector, New Maadi Area POSTAL/ZIP CODE 2130 PHONE (+20-2) 2703 1438 / 2703 1439 / 2706 5445 FAX (+20-2) 2703 1457 EMAIL info@egpc.com.eg WEBSITE www.egpc.com.eg DESCRIPTION Build-own-operate

(BOO) contract for the Exploration of a 2,058km2 onshore block including 8 wells STATUS New Tender TENDER CATEGORIES Gas Processing & Distribution, Oilfields & Refineries TENDER PRODUCTS Gas Exploration & Production, Oilfields Exploration & Development

FAX (+966 (2) 6623297 EMAIL info@arabiacement.com WEBSITE www.arabiacement.com DESCRIPTION Engineering, Procurement and Construction (EPC) contract for the expansion of an existing cement plant PERIOD 2017 STATUS New Tender TENDER CATEGORIES Industrial & Special Projects TENDER PRODUCTS Cement Plants

EGYPT SOUTH WEST MELEIHA ONSHORE BLOCK EXPLORATION PROJECT BLOCK 14

PROJECT NUMBER ZPR1272-E TERRITORY Cairo, Egypt CLIENT NAME Egyptian General

INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS

MAY 2014

MIDDLE EAST

www.ccsgulf.com | Tel: +971 4 346 6456 | info@ccsgulf.com

TENDERS

BIGPROJECTME.COM

JORDAN MINIMALLY INVASIVE SURGICAL CENTER PROJECT MARSA ZAYED DEVELOPMENT (PHASE 2)

PROJECT NUMBER WPR172-J TERRITORY Amman, Jordan CLIENT NAME Al Maabar Abdoun Real Estate Development Company ADDRESS C/o. Al Maabar Jordan International Investments Bldg., Capital Governorate POSTAL/ZIP CODE 850878 PHONE (+962-2) 406 7777 FAX (+962-2) 642 8424 EMAIL info@almaabar.com WEBSITE www.almaabar.com DESCRIPTION Construction of a Minimally Invasive Surgical (MIS) Center STATUS New Tender TENDER CATEGORIES Construction & Contracting, Medical & Healthcare TENDER PRODUCTS Hospital Construction

IRAQ WATER PUMP STATION PROJECT - MISSAN OIL FIELD

PROJECT NUMBER MPP2912-IQ TERRITORY Iraq CLIENT NAME CNOOC Iraq Ltd

ADDRESS Buzurgan Camp CITY Missan PHONE (+964-7800) 953 165 EMAIL info@cnoociraq.com DESCRIPTION Construction of a water pump station at an oil field CLOSING DATE April 22, 2014 STATUS New Tender

TENDER CATEGORIES Power & Alternative Energy, Water Works TENDER PRODUCTS Substations Construction, Water Transmission & Distribution Networks, Water Treatment Plants

INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS

MIDDLE EAST

www.ccsgulf.com | Tel: +971 4 346 6456 | info@ccsgulf.com

MAY 2014

OCTOBER 2013

MIDDLE EAST

CONTENTS

DIARY MAY 2014

BIGPROJECTME.COM

CONSTRUCTION OPPORTUNITIES A number of events are taking place in May 2014 for the construction industry.

HAPPENING THIS MONTH...

BIG PROJECT ME ROUNDS UP THE REGION’S BEST EVENTS AND CONFERENCES FUTURE MAKKAH

for up-to-date technology and

huge potential offered by the

designers and senior executives

JEDDAH CENTRE FOR FORUMS &

equipment.

UAE and regional markets

from all over the world.

EVENTS, SAUDI ARABIA

with access to international

4-6 MAY 2014

manufacturers and dealers

Makkah International Urban and

ARABIAN WORLD

Infrastructure Development Event.

CONSTRUCTION SUMMIT

operating in the region.

BUILDING AND CONSTRUCTION EXHIBITION

DUBAI, UNITED ARAB EMIRATES 14-15 MAY 2014

WORLD STADIUM CONGRESS

TRIPOLI, LIBYA

MIDDLE EAST ROAD SAFETY &

The summit explore the

2014 – HOSTED IN QATAR

19-22 MAY 2014

ITS SUMMIT

opportunities and challenges

DOHA, QATAR

Libya Build today is the largest

MUSCAT, OMAN

presented by the unprecedented

19-21 MAY 2014

International exhibition held in

12-13 MAY 2014

programme of Megaprojects being

Network with 100+ industry

Libya, specialised in the Building

The summit will create a platform

developed in the GCC, Iraq and the

stakeholders looking to promote the

and Construction sector.

to learn best practices and to

wider Middle East and the prospects

development of sustainable world

coordinate efforts in order to

for the global construction industry

class stadiums.

strategically adapt to current trends.

following the possible suspension of

UAE CONTRACTORS FORUM AND AWARDS

sanctions against Iran. PROJECT QATAR 2014

CITYSCAPE QATAR 2014

PARK HYATT, DUBAI, UAE

DOHA, QATAR

2-3 JUNE 2014

QATAR NATIONAL CONVENTION

DECOBUILD 2014

26 - 28 MAY 2014

The UAE Contractors Forum and

CENTRE (QNCC)

SHARJAH EXPO CENTRE

Cityscape Qatar is slated to become

Awards will highlight existing

SHARJAH, UNITED ARAB EMIRATES

one of the leading platforms in

opportunities for contractors in

14-17 MAY 2014

bringing together investors, real

the UAE and will address major

Decobuild will help exploit the

estate developers, architects,

challenges facing the industry.

12-15 MAY 2014

Project Qatar 2014 attracts buyers

MIDDLE EAST

and industry leaders looking

LIBYA BUILD: INTERNATIONAL

MAY 2014

INDUSTRY EVENT PROJECT QATAR

BIGPROJECTME.COM

INDUSTRY EVENT PROJECT QATAR

BIG PROJECT ME PREVIEWS THE 11TH EDITION OF PROJECT QATAR AS INTERNATIONAL INTEREST IN THE DOHA-BASED CONSTRUCTION SHOW GROWS

MIDDLE EAST

PROJECT QATAR, THE 11th International Construction Technology & Building Materials Exhibition, is proud to welcome 24 international pavilions at the Qatar National Convention Centre (QNCC), on 12 – 15 May, 2014. The countries featuring international pavilions include: Austria, Belgium, Canada, China, Egypt, France, Germany, Greece, India, Indonesia, Iran, Italy, Jordan, Korea, Kuwait, Malaysia, Pakistan, Palestine, Portugal, Romania, Spain, Turkey, the UAE and the United Kingdom. “The international pavilions have been fundamental to the success of Project Qatar, which has a long history of attracting many global exhibitors and visitors. The pavilions offer international exhibitors a central platform to showcase their expertise, products and services,” says Rawad Sleem, project manager of Project Qatar 2014.

MAY 2014

The newcomers making their debut in 2014 are Indonesia, Palestine and Romania, growing markets which are eager to participate in Project Qatar 2014 at a time where Qatar is the heart of the construction industry in the GCC and internationally. The participation of all these international pavilions demonstrates their recognition of the importance and commercial value of partnering with Project Qatar 2014, positioning their nations in Qatar, amongst key global leaders in a market that is experiencing world leading

exponential growth in infrastructure, building and construction. International focus has increased in anticipation of the FIFA World Cup in 2022 and working towards the achievement of the Qatar National Vision 2030. In 2014, the international response rate and interest has been vast and a large number of new global exhibitors and new countries will also appear for the first time with over 2,100 companies from 47 countries covering the QNCC’s entire 41,500 sqm of indoor and outdoor exhibition space.

“PROJECT QATAR IS AN EVENT THAT IS EVOLVING EVERY YEAR IN A MARKET POISED FOR EXCEPTIONAL GROWTH”

INDUSTRY EVENT PROJECT QATAR

PROJECT QATAR 2014 LAUNCHES TWO BRAND NEW CONFERENCES LightingTech Qatar and HVACTech Qatar are two brand new specialised conferences launched concurrently with Project Qatar 2014. With Qatar at the heart of the growing construction industry in the GCC and internationally with $350 billion of projects currently in the planning or construction phase, Project Qatar 2014 has expanded its conference series to support this growth.

“This is the third time we are participating in Project Qatar. It is one of the leading trade exhibitions and one of the most important events for us to attend in the GCC region. “Due to its diverse range of exhibitors and attendees, Project Qatar has offered us many opportunities and this year we plan to feature our entire range of products, giving us a platform to showcase our expertise in steel and enhance our access to the lucrative Qatari and GCC markets,” says Mohammed Al Afari, VP of Marketing at Emirates Steel, a Gold Sponsor of the event. “Project Qatar is an event that is evolving every year in a market poised for exceptional growth. Taking part in such an event allows us to network effectively, have direct contact with end customers and build upon the excellent business partnerships and opportunities we made at last year’s successful exhibition. There are many construction and infrastructure projects in Qatar, in preparation for the FIFA World Cup in 2022,” Al Afari added. “In 2014, $40 billion is going to be invested in various projects in this booming market. Project Qatar 2014 is definitely the place to be

which is why the French pavilion organized by UBIFRANCE will gather nearly 30 French companies offering various state of the art technologies and French know-how for the building industry. “Some of these companies are already active in the Qatari market and a number of others are looking forward to Project Qatar 2014 to network with partners and distributors,” adds Francois Sporrer, French Trade Commissioner and director of UBIFRANCE Middle East. Project Qatar 2014 is also set to unveil an advanced business-to-business matchmaking platform for companies to meet potential partners and suppliers. This exhibition management software is an advanced planning technology, a simple way for visitors to register and navigate through the hundreds of exhibitors that make up Project Qatar and facilitate a connection between exhibitors and visitors who share similar interests and backgrounds. Visitors and exhibitors will also benefit from an advanced mobile application that will provide detailed information and updates about Project Qatar 2014.

HVACTech Qatar 2014 will bring together private and government project owners, planning bodies, contractors and consultants, utility operators and companies (water, power and district cooling), regulators and solution providers in a specialised forum to address the latest opportunities and challenges in the HVAC and cooling industries. The conference represents a forum for the local Qatari, Gulf and regional markets to address the latest opportunities and challenges in the HVAC and cooling industries. It will highlight the latest case studies and technological solutions available, within the framework of local and regional market conditions and the developing regulatory environment, whilst offering a highly targeted networking platform enabling the establishment of lucrative business partnerships. Organisations speaking at HVACTech Qatar include: Doha Metro Project – Red Line North Underground, ISG JV, Qatar Project Management, Qatar Foundation, KEO International Consultants, Marafeq Qatar, Tatweer UAQ Real Estate Development, Arab Engineering Bureau, Hill International, NG Global FZ LLC, Atkins Qatar, Ras Al Khaimah Free Trade Zone, Tanween, Trans Gulf Electromechanical, Condair Ltd and SAFID.

MAY 2014

MIDDLE EAST

EVOLVING EVENT Project Qatar 2014 has grown from previous years, reflecting the growing importance of the Qatari market.

LightingTech Qatar 2014 is designed to address the lighting industry needs specific to the Qatari market, in view of the current and upcoming construction projects and sustainability goals within Qatar. Targeted an audience of architects, designers, specifiers, construction professionals, project owners, as well as government officials and regulators in Qatar, these delegates will hear from industry experts about the most innovative projects and solutions from across the region and the international market and to discover the latest technology advancements, government regulations, industry standards and product certifications that help address the specific needs of the lighting industry in Qatar.

INDUSTRY EVENT BIG 5 SAUDI

BIGPROJECTME.COM

SURPASSING EXPECTATIONS The 2014 edition of Big 5 Saudi comfortably surpassed the 2013 edition, with 543 exhibitors from 39 countries.

INDUSTRY EVENT BIG 5 SAUDI

BIG PROJECT ME REVIEWS THE BIGGEST SHOW IN BIG 5 SAUDI’S HISTORY

MIDDLE EAST

THIS YEAR’S EDITION of The Big 5 Saudi proved to be the biggest in the event’s history, organisers have told Big Project ME. With 543 exhibitors from 39 countries occupying 10,281sqm, the construction show surpassed the 2013 edition by a comfortable margin, cementing itself as a major regional event with a strong international reach. It also saw the launch of a range of free to attend educational events to add value for both visitors and exhibitors. Also, a first for this year was the Live Product Demonstrations during which the Exhibitors showcased their innovative products.

MAY 2014

In total, The Big 5 Saudi welcomed 10,724 unique visitors from the construction industry, an increase of more than 7% from the previous year. “I was able to learn the latest market trends, meet with suppliers, network with professionals and see colleagues. It was truly a “big” event,” said Khaled Hashem, design architect, Zuhair Fayez Partnership and a visitor to the show. The growth of The Big 5 Saudi is reflective of the buoyant Saudi construction sector, with an estimated US$94,147 million of projects confirmed for 2014. Much of this spend will be focussed on the Western Region of the country, for which Jeddah is the key hub.

BIG 5 SAUDI 2014 n Number of years the show has run: 4

n Exhibiting countries: 39

n Exhibition stand space: 10,281sqm

n Number of exhibitors: 543

n Visitors to the show: 10,724

n Total participants: 14,466

Also new for this year was The Big 5 Seminar Series, which was a schedule of educational seminars with local, regional and international experts, presenting their views on the latest trends and challenges, sharing best practice and taking part in panel discussions. The seminars ran under the overarching theme of sustainable construction, from materials, architecture and master planning, to presentations on best practice, including the King Abdullah University for Science & Technology (KAUST) and the White Sky iHouse, a revolutionary a zero-energy residential concept designed to integrate electric cars and wind powered gyrocopters.

INDUSTRY EVENT CITYSCAPE ABU DHABI 2014

BIGPROJECTME.COM

INDUSTRY EVENT CITYSCAPE ABU DHABI 2014

AT CITYSCAPE ABU DHABI 2014, BIG PROJECT ME FINDS HOW SUSTAINABILITY AND RESIDENTIAL DEVELOPMENT WILL IMPACT THE MARKET IN THE UAE CAPITAL IN 2014

MIDDLE EAST

NATIONAL SECURITY ADVISOR and ViceChairman of the Executive Council of Abu Dhabi, HH Sheikh Hazza bin Zayed Al Nahyan inaugurated Cityscape Abu Dhabi 2014 to more than 120 exhibitors from across the Middle East, UK, Turkey and the USA at the Abu Dhabi National Exhibition Centre (ADNEC). The eighth edition of the property and real estate exhibition witnessed leading developers from the UAE’s capital city assemble, daily between April 22 and 24 of April, 2014, to showcase their developments and upcoming projects to potential investors in the emirate. The fact that the number of pre-registered attendees to the show grew by 26% from last year is considered to be the first of many positive signs emerging from Abu Dhabi’s property market. “There certainly seems to be more footfall at the event than we saw last year,” said William Neill, head of Abu Dhabi for Cluttons, in conversation with Big Project ME.

MAY 2014

“There seems to be an increased interest in the event, especially due to developers launching new schemes and projects leading up to the exhibition. The vibe is very positive.” The theme of sustainability was highlighted throughout the event by the participation of national organisations known for their expertise in environment conservation and energy efficiency. Having recently completed the LEED Platinum Siemens Middle East headquarters, Masdar City presented their solutions and strategies at Cityscape Abu Dhabi 2014.

“ABU DHABI HAD A GOOD YEAR LAST YEAR AND RENTS WERE UP 16%”

“As we enter an important phase of the city’s growth and development,” said Anthony Mallows, director of Masdar City, “this exhibition allows us to demonstrate that the vision is now a sustainable operation, with attractive partnership and investment opportunities.” Also exhibiting at the event was the Abu Dhabi Urban Planning Council (ADUPC). Speaking to Big Project ME, Abdulla Ahmed, planning department manager of Development Review at ADUPC said the organisation’s exhibit for 2014 was aimed at showing Estidama’s ‘tangible benefits’ to the audiences at the show. “ADUPC has always participated in Cityscape Abu Dhabi, and this is our fifth consecutive year at the event,” Ahmed said. “We have altered our exhibit model this year to reflect the developments made with our practices. “Our Estidama Corner is aimed at bringing the aims of Estidama closer to the public and giving them the opportunity

INDUSTRY EVENT CITYSCAPE ABU DHABI 2014

to see and sense the tangible benefits of its implementation,” Ahmed added. Optimism evident at the exhibition seemed to emanate the most from Abu Dhabi’s residential sector, with announcements by leading property developers proving analysts’ confidence in the capital’s market. A day prior to the commencement of the exhibition, Aldar Properties launced three new residential projects, open to investment from UAE nationals and expats, at Yas Island, Al Raha Beach Waterfront and Al Bateen area in the emirate. “We (Aldar) extensively studied the Abu Dhabi property market and its trends before deciding to launch these projects,” said Gurjeet Singh, chief development officer of Aldar Properties. “All three spots – Yas, Al Raha and Al Bateen – are wellenabled in terms of infrastructure, and we believe each of them is ripe to be launched in the market. “Their locations differentiate them from the existing ones in Abu Dhabi, and we will accordingly develop the projects to suit the current demand in the property market,” Singh added. While notable other luxury residential projects, such as the Al Reef Villas 2 development by Manazel Real Estate were also announced, the standout announcement from the housing sector

remained the Emirati-designed energy efficient project, ‘Green Pre-designed Villa Concept’. Emirati designer Malak Ali Hassan, owner and CEO of 3Dimension, the company responsible for the pre-designed turnkey villas said the project would incorporate various specifications and eco-friendly materials, along with intelligent design strategies to ensure a high sustainability quotient in the units. “We planned the pre-designed green villas based on our objective to promote smarter water usage and reduce energy consumption,” she explained, “while ensuring that only sustainable building materials are used.” Meanwhile, experts warned that the momentum shown by Abu Dhabi’s residential sector could witness a slowdown. “Abu Dhabi had a good year last year and rents were up 16%,” explained Matthew Green, head of research at CBRE Middle East. “The property market is at the start of a growth curve that could last 12-15 months, and that could unfortunately translate into increased rents. The impact of removing rent caps has already been visible in the final quarter of 2013 and Q1 of 2014. While we don’t expect that level of quarterly growth, we certainly expect more growth year-on-year in 2014,” Green predicted.

BAROMETER OF PROGRESS Wouter Molman, director, Cityscape Group speaks to Big Project ME: “It is often said that Cityscape is a barometer of the market and its progression. This year, we have found an increased number of developers and visitors to Cityscape Abu Dhabi, which goes on to show the renewed optimism investors have discovered in the market. A lot of developers, who had initially exhibited with us in the heyday, but were briefly absent after the market crash, have returned to the event this year. We even hosted Masdar City for the first time, which is a greatly positive sign for the industry. Abu Dhabi has pioneered the drive for sustainability in the region, and a lot of projects exhibited at Cityscape Abu Dhabi 2014 have proven this trend will continue. Abu Dhabi’s recovery in property markets began in early-2013, and the show this year has been a result of a year’s worth of growth and progress.”

MAY 2014

MIDDLE EAST

SUSTAINABILITY FOCUS Sustainability was a major area of focus at Cityscape Abu Dhabi this year.

CONSTRUCTIVE CRITICISM

BIGPROJECTME.COM

GAVIN DAVIDS

Council Created Complications Gavin Davids says that recent comments by the chairman of the National Committee for Contractors at the Council of Saudi Chambers could have an incredibly damaging effect

MIDDLE EAST

THE CHAIRMAN OF the National Committee for Contractors at the Council of Saudi Chambers recently announced some startling news during a press conference late last month. Speaking at the Makkah Chamber of Commerce and Industry, Fahd Al-Hammadi told local media that more than 100,000 contractors quit the business over the last one year. “The number of registered contractors at the chambers in the Kingdom fell to 140,000 from 240,000 in a year. They just disappeared from the market, according to statistical studies,” he fretted. Al-Hammadi put the number of classified contractors at 3,100, which accounts for 2% of contractors taking up projects in the Kingdom. Furthermore, the chairman warned against a clause in the new labour regulations, which would permit foreign workers to keep their passports and to obtain a transfer to any sponsor they wished when the contract period with original sponsoring company ended. He said that if this clause is implemented, it would prove to be ‘catastrophic for the Saudi contractor market’. Let that sink in for a minute... This is the chairman of the National Committee for Contractors, at the Council of Saudi Chambers, advocating against allowing

MAY 2014

foreign workers to keep their passports and obtain transfers to new sponsors, or jobs. And he wonders why contractors in the Kingdom are shutting down… Given that the Saudi Arabian government is determined to push through the Nitaqat reforms, there are increasingly limited options open to foreign workers. By taking away their passports and barring them from obtaining transfers to new jobs, the present system is simply adding to the bottleneck of stalled projects, rather than allowing for the free and fair transfer of labour according to the time-honoured principles of supply and demand. There is more than enough work to go around for everyone in the Kingdom. If the Nitaqat system is to succeed, it is crucial that the Saudi Arabian government allows the existing labour force to move around freely and take up jobs where they’re available.

This allows for jobs to be completed on time and without spiralling out of control, while also allowing the local population to be integrated into the workforce, with minimal pressure or expectations from them. I would love for the chairman to explain how he believes this new clause in the labour regulations is going to prove to be ‘catastrophic’. Ultimately, what needs to be reinforced is that taking passports away from foreign workers is an illegal practice that has been clamped down upon by a number of governments in the region. We have seen the outcry that has been raised in Qatar over the Kalafa system and how the government there is slowly pushing through much needed reforms. Meanwhile, the UAE maintains that employers withholding their employee’s passports is illegal. In fact, employees now have legal avenues they can peruse if their employer seizes their passport and can quit without notice, while demanding compensation for the dismissal. While it’s fantastic that the Saudi government is introducing such positive regulations, lets hope it follows the UAE’s lead and ensures that their expatriate workers are adequately protected.

“ULTIMATELY, WHAT NEEDS TO BE REINFORCED IS THAT TAKING PASSPORTS AWAY FROM FOREIGN WORKERS IS AN ILLEGAL PRACTICE”

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