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126
SEPTEMBER 2016 meconstructionnews.com
THE BUSINESS OF CONSTRUCTION
in pole position
Why the first avenue mall and hotel project Will make a difference to dubai’s retail landscape
GETTING CLOSER TO THE TOP...
Getting closer to the top of the tallest mountain in the UAE will soon be a lot easier, thanks to the fleet of Volvo construction equipment used in the building of the road to the Jebel Jais mountain. When it’s finished, the route will run from Ras Al-Khaimah right to the 1,910 metre summit. The road has already become a popular destination for motoring enthusiasts, who like to show off what their machines can do. But when the road runs out, that’s where the Volvo VIDEO http://goo.gl/FPsU43
operators show off their machines. And it’s impressive to see what they can do. If you want to get closer to the action, scan the code and watch the video. Building Tomorrow.
Contents
Issue 126 September 2016 08
16
20
26
36
46
16 Nakheel’s recovery plans
38 The Digital Process
06 ME Construction News.com OnlIne
The biggest stories from Big Project Middle East’s home on the web
analySIS
Big Project ME details the developer’s future plans following its debt-free announcement
cOMMenT
Bernhard Niessing discusses digital technology and construction materials
08 Saudi FM wanted crane moved 20 Road and Transport Authority 42 Green Legislation The bIg pIcTure
In prOfIle
Finance ministry wanted Mecca crane moved 10 months before deadly incident
Big Project ME speaks to the RTA to find out how Route2020 will impact Dubai’s growth
12 Gary Neville launches project
26 In Pole Position
InTernaTIOnal newS
Former football star launches real estate project in central Manchester
14 Dubai rents decline MarkeT repOrT
CBRE report finds that decline in rental rates is spreading into highdensity residential locations
SITe VISIT
Big Project ME visits the First Avenue Mall and Hotel in Dubai Motor City
SuSTaInabIlITy
Saeed Al Abbar examines the evolution of the UAE’s green building legislation and its future impact on the country
46 Solar Superpower caSe STudy
ACWA Power’s Noor 1 Concentrated Solar plant will shape Morocco’s future
34 To Liquidate or not to Liquidate 60 Lighting the Way cOMMenT
laST wOrd
Heba Osman examines the challenges around the liquidation of bonds in construction contracts
Easa F Al Gurg on why it is essential to have the right lighting systems in place September 2016 1
Introduction
Retail for wider Dubai
W
hen it comes to retail outlets and malls in Dubai, shoppers are never short of options. The city is known for its retail culture and its malls are justifiably famous around the world for their offerings and experiences, not to mention their size! However, what has been noticeable about the development of these malls – the Dubai Mall, Mall of the Emirates and Deira City Centre, Ibn Battuta, Marina Mall and so on – is that they’re either built along Dubai’s main arteries or at the very heart of commercial and residential districts. With the city constantly expanding, there are more and more residents living on the outskirts of the city. The popularity of residential developments like Arabian Ranches, Motor City and Jumeirah Village Triangle and Circle, amongst many others, means that there are thousands of potential customers who have to travel a significant distance to indulge in some retail therapy. With this in mind, it makes sense that a developer would look to build a shopping mall that would be easily accessible to residents living in these areas. While Majed Al Futtaim was the first to launch with City Centre Me’aisem, its relatively small size and limited offerings means that the majority of its footfall will come from its immediate area.
eDItorIAL eDItor gAVIN DAVIDS gavin.davids@cpimediagroup.com +971 4 375 5480
PUBLISHING DIrector RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471
oNLINe eDItor BEN FLANAgAN ben.flanagan@cpimediagroup.com SUB eDItor AELRED DOYLE
eDItorIAL DIrector VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5472
aelred.doyle@cpimediagroup.com ADVertISING coMMercIAL DIrector JUDE SLANN jude.slann@cpimediagroup.com +971 4 375 5496
Supported by
coMMercIAL DIrector MICHAEL STANSFIELD michael.stansfield@cpimediagroup.com +971 4 375 5497 SALeS MANAGer FAAJU ABDULFATAH
M
ﺟﻤﻌﻴﺔ اﻟﺸﺮق اﻻوﺳﻂ ﻟﺼﻨﺎﻋﺎت اﻟﻄﺎﻗﺔ اﻟﺸﻤﺴﻴﺔ
Middle East Solar Industry Association
Empowering Solar across the Middle East
2 September 2016
faaju.abdulfatah@cpimediagroup.com +971 4 375 5495
This is why Al Tawfeeq for Development and Investment’s First Avenue Mall and Hotel is such an intriguing project. Not only is it centrally located in Dubai Motor City, its proximity to Sports City, IMPZ, Arabian Ranches, Al Barari, Mudon and Layan means that it should become the destination of choice for the majority of the area. Its planned retail and F&B offerings reflect that, while its design is a continuation of the growing trend for open-air and accessible shopping malls in Dubai. It promises to be a fascinating development, and as a resident in the area, I can’t wait to see how it progresses. Finally, I would like to remind you all that the nominations for the 2016 Big Project ME Awards are now open. We’ve already started receiving nominations and enquiries, so please do visit www. bigprojectmeawards.com to ensure that you’re in contention come November 22, 2016.
Gavin Davids editor gavin.davids@cpimediagroup.com @MecN_Gavin
MArKetING MArKetING MANAGer LISA JUSTICE lisa.justice@cpimediagroup.com +971 4 375 5498 DeSIGN Art DIrector SIMON COBON cIrcULAtIoN & ProDUctIoN DIStrIBUtIoN MANAGer SUNIL KUMAR sunil.kumar@cpimediagroup.com +971 4 375 5476 ProDUctIoN MANAGer VIPIN V. VIJAY vipin.vijay@cpimediagroup.com +971 4 375 5713 WeB DeVeLoPMeNt MOHAMMAD AWAIS SADIq SIDDIqUI SHAHAN NASEEM
PUBLISHeD By
Registered at IMPZ PO Box 13700 Dubai, UAE Tel: +971 4 440 9100 Fax: +971 4 447 2409 www.cpimediagroup.com FoUNDer DOMINIC DE SOUSA (1959-2015) PrINteD By PRINTWELL PRINTINg PRESS LLC © Copyright 2016 CPI. All rights reserved 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.
Marc Evertse, SOHAR Executive Commercial Manager
Why go through the Strait when you can go straight to the Gulf.
With deep-water berths outside the Straight of Hormuz, investments of $25 billion and seamless sea-road-air access to the region’s largest markets, it’s no wonder so many companies choose to start their journey in SOHAR, one of the world’s fastest growing Port and Freezone developments.
Online
MOST POPULAR
FEATURED
READERS’ COMMENTS
CONSTRUCTION
LESS TURbULENT
Habtoor Leighton Group CEO arrested in Dubai
TIMES FOR DUbAI PROPERTy MARkET
It makes sense that real estate values are back on the way up (Dubai property price rises ‘imminent’, August 22). The days of mass speculation are well and truly behind us and the market is much more mature. So the severe highs and lows are a thing of the past.
INFRASTRUCTURE
Muscat airport terminal works ‘on schedule’
In pictures: Emaar Act One | Act Two
Name withheld,
project in Dubai Opera District
online comment
CONSTRUCTION
Saudi Oger ‘faces $800m liabilities, bankruptcy’
HIgH-SPEED FUTURE FOR LOgISTICS
I am happy to see the hyperloop in the media again, given the DP World
CONSTRUCTION
study over its potential use
Workers evacuated in Viceroy Dubai tower fire
at Jebel Ali port (Dubai’s DP World to study ‘hyperloop’ container transport, August 17). It’s interesting to see how high-speed tube transport could work in logistics. Perhaps forwardthinking Dubai is where
CONSULTANT
RMJM appointed to work on The Tower in Dubai 6 September 2016
Video: Ain Dubai, world’s largest observation wheel, takes shape in Dubai
this will really take off. James Swift, online comment
The big picture
Employees questioned 170 employees of Saudi Binladin Group have been questioned by Saudi authorities investigating the cause of the crane collapse.
Saudi Finance Ministry wanted Mecca crane moved months before accident Ministry stopped reimbursing expenses 10 months prior to deadly incident The Saudi Finance Ministry has claimed that it advised that the giant crane at Mecca’s Grand Mosque be removed 10 months before it collapsed last September, resulting in 107 deaths and many injuries. According to a report in the Saudi Gazette, the ministry, which represents the government in the mosque’s expansion projects, told the Bureau of Investigation and Public Prosecution (BIP) set up by the kingdom to probe the disaster that it stopped reimbursing expenses for the crane 10 months before the accident because the equipment was no longer considered useful. The BIP has interrogated an official from the ministry three times during the past few months, 8 September 2016
the daily reported. The official disclaimed any responsibility of the ministry in the accident and said it had asked for the crane’s removal but the project manager, despite assurances, did not comply. The official, an engineer whose name has not been revealed, said he was responsible for following up the expansion project with its contractor, the Saudi Binladin Group, and to make payments, but had nothing to do with the safety measures on the project. Fourteen people are on trial in the case, reported to be six Saudis including a billionaire, two Pakistanis, a Canadian, a Jordanian, a Palestinian, an Egyptian, an Emirati and a Filipino. The defendants
are accused of negligence, damaging public property and ignoring safety guidelines, the report said; their names have not been revealed. According to the report, 170 employees of the Saudi Binladin Group have been questioned by investigators in the probe. Forty-two others are also under investigation, including 16 members of the Binladin family, but no charges have
170
Number of SBG employees questioned by investigators
been brought against them. The 1,350t crane collapsed onto the Grand Mosque amid unusually strong winds on September 11 last year, bringing down slabs of concrete on worshippers below. Saudi Binladin Group has suffered months of turmoil since the accident, which saw it being banned from bidding on new projects by the Saudi government. The ban was lifted earlier this year and the contractor has resumed bidding for work. SGB also recently secured a $667 million loan from Arab National Bank and Saudi National Bank, allowing it to pay salaries to some 10,000 employees, repay bondholders and resume work on stalled projects.
The big picture
UAE sees 6% growth in construction jobs More online job postings in July despite decline in wider Gulf and Egypt The UAE construction industry is hiring, with an increase in jobs posted online over the last year, despite a decline in the wider Arabian Gulf and Egypt, a new report shows. Engineering, construction and real estate is now the third-fastest growing sector for recruitment in the UAE, according to a report by Monster. com. The recruitment website’s monthly Monster Employment Index showed a 6% increase in online job postings in July compared to the same time last year. That bucked the wider trend in the UAE, with a 22% decline in overall online job postings. There was also a 12% decline
in job listings in the engineering, construction and real estate sector in the Gulf and Egypt region as a whole, with the index for that sector now at its lowest level for at least a year. Healthcare is the fastest growing occupation in the
12%
Decline in overall job postings in engineering, construction and real estate sector for Gulf and Egypt region
UAE, providing a boost to the construction industry, said Sanjay Modi, managing director for the APAC and Middle East regions at Monster.com, in a statement: “Amid an uncertain employment landscape in the UAE, healthcare continues to demonstrate strong demand for medical professionals, and with exciting plans ahead in the industry, opportunities are bound to arise across other sectors as well, including construction, technology and education, which will be needed to support these initiatives.” Monster.com cited recent developments in the healthcare field, including the construction of a number of new international
hospitals across the UAE and a $2 billion project to establish a modern medical university by 2017. The Monster Employment Index measures job posting activity in the Middle East, based on data from many employers and online recruitment sites. The overall index fell 31% year-on-year in July, with only Bahrain, Kuwait and Oman recording positive annual growth in listings. Egypt had the most notable decline in online recruitment among monitored countries, with a 34% drop in listings. In Saudi Arabia, the oil & gas sector had the strongest growth, with 46% growth in job listings, while engineering and production fell 30%.
Growing sector Engineering, construction and real estate is now the third-fastest growing sector for recruitment in the UAE.
September 2016 9
The big picture
Qatar wage protection system reveals payment crisis, local contractors say Oil price crisis has made it hard for companies to pay workers on time Contractors in Qatar say that the introduction of the wage protection system (WPS) has revealed a long-standing “payment crisis” in the country, it has been reported. While the new system has helped ensure that hundreds of thousands of construction workers now get their salaries on time, contractors say the oil price crisis has made it harder for companies to pay workers via direct bank deposits in a timely manner, as per the new law. Finance-related contract disputes have halted work on major Qatari projects for a number of years, with contractors forced to deal with clients missing Thousands left to wait Thousands of workers continue to wait for WPS to be implemented at their companies.
10 September 2016
payments or not paying at all. “When the contractor runs dry on funds due to payment delays, he doesn’t have any choice in not paying the workers. They simply can’t pay money they don’t have. Bank finances have a limit and wages mostly (are) financed by the project cash flow,” Zeyad Al Jaidah, managing director and co-founder of Qatari systems integrator TechnoQ, told Doha News. The WPS was signed into law by Qatar’s Emir in February 2015 and came into effect in November that year. As of June 2016, the country’s labour ministry said that 1.6 million residents were covered under the system.
However, thousands of workers continue to wait for WPS to be implemented at their companies, the report said. This is because many companies cannot afford to comply with the law for several reasons, said Vasanth Kumar, CEO of Arabian MEP, a Qatari subcontracting firm specialising in MEP services. While he welcomed the introduction of the scheme and asserted that Arabian MEP employees are paid on time, Kumar explained that some companies in Qatar are suffering because of rapid over-expansion and lack of planning, while others are suffering due to taking on projects at low prices, which
means they’re losing money and don’t have cash to pay their bills. Another issue highlighted by contractors in the country is that clients often postpone contracts that have already been awarded, which leads to a loss of revenue and negative cash flow due to the need to hold on to surplus manpower. To resolve some of these issues, Kumar said that clients and construction companies use FIDIC (International Federation of Consulting Engineers) contract forms which empower the engineer or client representative to certify completed works on-site on a fair assessment basis and issue payment certificates on time.
The big picture
2
1. ArAb ContrACtors turnover hits $2bn
$249.5m
Egyptian construction firm Arab Contractors says its total turnover increased
Initial costing estimates for the 22,296sqm Phase IV expansion of Great Ormond St Hospital
by $112.6 million yearon-year to $2.14 billion in the current financial year, thanks to recent works in the country’s new capital city project, according to press reports. Company chairman Mohsen Salah said that the volume of work for Egypt’s new administrative capital, which involves utilities, housing, roads and infrastructure projects, is worth over $225 million. Arab Contractors is also executing utility projects in New El Alamein City, northwest of Cairo, at a cost of $56.3 million, Salah said. The company is also working on several infrastructure and road projects in other African markets worth in excess of $112.6 million combined. Arab Contractors suffered a sharp decline in business volume in 2015, to $1.68 billion for the financial year. With the new projects in hand, that figure has surged to $2.13 billion in the current fiscal year, Saleh said.
12 September 2016
2. Former mAnChester united legend plAns $263m projeCt Former Manchester United and England footballer Gary Neville has revealed designs for a $262.8 million twin tower project at the heart of the upcoming St Michael’s development in Manchester,
England. The proposal would involve knocking down an entire block in Manchester’s city centre, with plans to build two skyscrapers, a five-star hotel and a split-level public plaza, local media said. The two mixed-use towers would be 21 storeys and 31 storeys respectively and surrounded
by public spaces. Neville’s Jackson’s Row Developments company has teamed up with Singapore’s Rowsley, Beijing Construction and Engineering Group International, and Manchester City Council to bring to life proposals designed by Make Architects.
The big picture
4. egypt invites developers For ppp bids worth $25bn
6
People killed and four injured in southwest China when a support collapsed at a construction site
3 1 4
180,000 sqm Amount of additional retail space that will be available in Nigeria by the end of 2016
3. dormA+kAbA wins jordAn hospitAl ContrACt Swiss access and security provider dorma+kaba has announced that it has won a contract to provide door solutions for the King Hussein Cancer Centre (KHCC) expansion project in Jordan. The company will provide solutions for all doors that are open and accessible to patients, doctors, care staff,
administrative personnel, visitors and suppliers for the planned expansion. It will also provide detailed design and execution for all opening access solutions that will be compatible with all door types including hollow metal, wooden, aluminium and glass. The King Hussein Cancer Centre expansion will consist of an inpatient tower and outpatient building that will double the capacity of
the existing centre. It will provide improved, integrated space for patient care, research and education. The 13-floor inpatient tower will have 182 additional single occupancy patient rooms, an expanded diagnostic imaging and radiotherapy unit, an expanded bone marrow transplantation unit, and adult and paediatric specialty ICUs. The project is expected to complete in late 2016.
Egypt’s New Urban Communities Authority (NUCA) is set to invite 12 real estate developers to bid for a new phase of publicprivate partnership (PPP) projects worth a combined $25 billion in four new cities. The projects cover a total of 11.9 million sqm over eight plots of land in the newly developed urban centres of Sixth of October City, Sheikh Zayed City, New Aswan and New Damietta. The NUCA said that the real estate firms shortlisted for the bid so far are Palm Hills for development, and Mountain View, Emaar Misr and Al Ahly for real estate development. Also listed are Wadi Degla Developments, Zizinia-ARDIC, Qatari Diar, SODIC and City Stars. Futtaim Group, Porto Holding and North Africa were also included. Other firms that wish to apply must have experience developing land areas of 100500 acres, and preference will be given to companies that can provide funding in US dollars. The criteria for judging the bids will be the highest share of partnership on offer, and the lowest development period.
September 2016 13
Market report
Rental declines spRead acRoss dubai
Decline in rental rates moving away from prime freehold markets and into high-density rental locations, CBRE report finds Rental declines Landlords in areas like Al Barsha, Oud Mehta and Bur Dubai are starting to lower their asking prices to get new tenants.
a Gulf News report said. “It is estimated that around 48,000 new residential units [apartments and villas] could enter the Dubai market during the period 2016 to 2018, provided that construction delays are at a minimal,” says Matthew Green, head of Research and Consulting at CBRE ME. This is broadly comparable
to the five-year average supply. Much of the upcoming housing is expected to be delivered in secondary and tertiary locations such as Dubailand, Jumeirah Village, Business Bay and Dubai Silicon Oasis. Freehold sub-markets like International City have also suffered more marked downturns in performance quarter-on-
Average Dubai Apartment Rentals (Q2 2012 - Q2 2016) Studio
One Bedroom
Two Bedroom
Three Bedroom
Lease Rates (‘000 AED/unit p.a.)
140 120 100 80 60 40 20 Q2 2012
14 September 2016
Q2 2013
Q2 2014
Q2 2015
Q2 2016
quarter, a reflection of the higher availability of units in the market at the moment, Green adds. “Amidst ongoing economic uncertainties, redundancies and lower accommodation budgets, we can expect to see further softening of demand levels and sales rates in the short term, especially for highend and larger unit typologies. “We expect to see this trend continue during the second half of 2016, with sale rates poised to drop further by an additional 3-5% in the coming quarters. However, we also expect to see locationspecific variances in performance.” During the quarter, average residential rental rates have dipped marginally, the report said, with declines at 1% and 2% year-on-year. Prime rental locations such as Dubai Marina and Downtown Dubai, as well as more secondary locations such as International City, IMPZ and Dubai Sports City, have seen average residential market rentals decline in Q2 2016.
Sources: CBRE Research
Rental declines are starting to show up across Dubai, moving away from the city’s prime freehold communities and into high-density rental locations such as Al Barsha, Oud Mehta and Bur Dubai, an update from real estate consultancy CBRE has found. While these three areas have witnessed some partial easing, the report warns that the effects are not being felt across the board, with demand remaining strong in places like Al Ghusais and the areas bordering Sharjah. Other market sources have also said that they are seeing similar trends, with vacancies starting to show up on a regular basis, causing landlords to lower their asking price to get new tenants. If not, those properties tend to end up being unoccupied for far longer periods than average,
News analysis
RecoveRy Plans Following Nakheel’s announcement that it is debtfree, Big Project ME examines what’s in the pipeline for the developer
On August 25, Dubai real estate developer Nakheel announced that it was debt-free, following the full repayment of its $1.19 billion trade creditor sukuk. This marks the end of the company’s financial restructuring, said Ali Rashid Lootah, chairman of Nakheel, who addressed local and international media at a specially organised press briefing. This process began in August 2011, and the company behind the Palm Jumeirah is now finally able to look forward, having fulfilled all its creditor obligations.
“It was a challenging period that we went through,” Lootah said. “[But] we’ve achieved it in a good manner and we’ve managed to meet all our commitments, and deliver them ahead of time. We’re now expanding in a big way, and you can see that. We don’t have any restrictions in our borrowing and we’ve got a lot of interesting projects [coming up]. Banks are ready to finance our projects as they’re viable and make commercial sense.” “We’re receiving a lot of interest,” he added. “The company is debt-free and we have a strong performance record. Our balance sheet is very resilient and banks are willing to lend to us.” On August 21, 2014, Nakheel announced that it had prepaid 16 September 2016
looking to the future Nakheel plans to launch $4.11bn worth of retail projects, along with adding 5,100 hotel units to its portfolio.
News analysis
all $2.15 billion of its bank debt – four years before the scheduled repayment date. “In six years since March 2010, Nakheel has achieved what some considered impossible: completion – ahead of time – of one of the largest, most complex financial restructuring exercises, followed by the successful execution of a new business plan that placed us on a new path to growth,” Lootah added in a statement released by Nakheel. “As we close the curtain on our restructuring programme, we look forward to starting a fresh chapter in which we are stronger and more resilient than ever.” Nakheel’s sukuk repayment comes in the wake of a number of achievements for the developer. This includes the meeting of restructuring plan targets two years ahead of the scheduled five-year implementation programme, with savings of $6.80 billion. The company also achieved year-on-year profit growth over the six years – from $261.3 million in 2010 to $1.19 billion in 2015 – and also launched more than 70 new projects, some of which are completed and operational, while others are in various stages of development. Furthermore, the developer says that it has handed over 9,132 villas and apartments and a further 1,923 land units to customers, while also diversifying its business to increase cash-generating assets. With the sukuk repayment complete, Nakheel can now look to raise more bank borrowings to fuel its massive construction programme. The developer has launched several new projects across various sectors, positioning it to become the region’s largest developer for retail and leasing assets. Nakheel Mall, Al Khail Avenue and Dragon City are three major retail projects currently underway, with the developer
“Banks are ready to finance our projects as they’re viable and make commercial sense. We’re receiving a lot of interest” estimating that it is adding 1.15 million sqm of NLA to its retail portfolio. Looking beyond 2018, it said that it expects that figure to rise to 1.53 million sqm. $4.11 billion worth of retail projects are currently under development, it added, with Dragon Mart II ($220.7 million), Golden Mile 1 and 2 ($191.9 million) and the Ibn Battuta Mall Expansion ($36.75 million) prominent among the projects that have been delivered. Some of the major projects currently under construction are the Deira Islands Night Souk for $337.8 million, the Nakheel Mall for $507.4 million, The Pointe for $325.6 million and Al Khail Avenue for $413.8 million. In terms of retail projects in the pipeline, Lootah says the Deira Mall ($1.11 billion), Dragon City ($429 million) and
Phase III of the Ibn Battuta Mall Expansion ($399.3 million) are the major developments in the planning stages. “For all our retail properties, we are signing lease deeds, almost on a daily basis,” said Lootah. “These are the big names that we’re talking to, but overall there’s a shift from luxury to a middleclass sort of retail. It suits us fine.” With regards to hospitality, Lootah revealed that Nakheel is looking to add 5,100 rooms to its portfolio, with 623 keys already added in 2016 through two economy hotels. There are plans to add 836 keys to the developer’s portfolio by 2018, through the construction of a luxury hotel and two economy projects. Looking beyond 2018, the chairman said that are plans to add 3,675 keys through six mid-scale hotels and an economy project, and to launch 1,000 serviced apartments. The hospitality projects currently under development will come at a cost of $735 million. The Dragon Mart II Ibis Styles project has already been delivered for $24.50 million, and will have 251 units. Three major projects are currently under construction. The Deira Islands RIU is a $123.8 million joint venture with Spanish hotel operator RIU containing 750 units and will be a resort and waterpark. Also under construction are the $50.90 million Ibn Battuta Mall Premier Inn and the $83.30 million Palm Tower St Regis, with 372 and 289 rooms respectively. Finally, Lootah said that there are a number of projects in the pipeline, with another joint venture with Centara in development. The Deira Islands Centara project is a $73.23 million project that will have 550 units. Also on Deira Islands are four hotels which will bring 1,000 keys into the developer’s portfolio. September 2016 17
In profile
Big Project ME speaks to Dubai’s Roads and Transport Authority to understand the impact Route 2020 will have on the city’s growth and development
a route t 20 September 2016
In profile
o the expo September 2016 21
In profile
J
une 29, 2016 was an important date in the history of Dubai, for it was the day when HH Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and the Ruler of Dubai, announced the approval of the contract award for the Route 2020 project. This announcement marked the beginning of planning and construction for the extension of Dubai Metro’s Red Line. Awarded to the Expolink Consortium, which consists of France’s Alstom Conglomerate, Spanish company Acciona and Turkish firm Gulermack, the $2.88 billion contract will link up the Dubai Expo 2020 site with the city’s existing metro services. “The construction of the Route 2020 is envisioned in the Dubai 2021 Plan for achieving sustainable development, providing an improved worldclass infrastructure and services. It also comes in implementation of the RTA Strategic Plan 2021 aimed at providing mass transit systems including metro and tramlines, buses and marine transit services, towards realising RTA’s vision of safe and smooth transport for all,” said HE Mattar Al Tayer, director-general and chairman of the board of executive directors of the RTA, at the time of the announcement. Alstom will supply 50 trains – 15 for the Expo and 35 to upgrade the Dubai Metro. It will also cater to the electromechanical works for the project. The Thales Group will provide the technical 22 September 2016
Not just about the Expo AbdulMohsin Ibrahim Younes, CEO of the Rail Agency at the RTA, says that Route 2020 will be vital to the future growth and development of Dubai.
systems, while Acciona and Gulermack will attend to the civil works, Al Tayer added. With construction on the project scheduled to start in the final quarter of the year, the focus now turns to the challenges associated with its delivery, as well as the impact it will have on Dubai in future. While it is being built with Expo 2020 in mind, the route itself will have a major impact in shaping Dubai’s growth over the coming years. It is expected that 25 million visitors will visit Dubai during the six months of the Expo, and that Route 2020 will have a ridership of 125,000 riders per day in 2020, RTA studies say. By 2030, that number is expected to rise to 275,000, with studies also revealing that about 35,000 riders will use Expo Station per day during weekdays, with 47,000 riders over the weekend. In total, this accounts for about 20% of the projected total number of daily visitors to the Expo.
“The RTA has developed a master plan for roads and transport services in support of Expo. The plan includes multiple transit options for lifting visitors from their places of residence to the Expo site”
Keeping all this in mind, AbdulMohsin Ibrahim Younes, CEO of the Rail Agency at the RTA, tells Big Project ME that while Route 2020 will be vital for the Expo, Dubai’s expansion and growth means it is set to play a crucial part in the overall master plan for Dubai’s growth and expansion. “Route 2020 connects the Red Line from Sheikh Zayed Road to the Expo 2020 site near Al Maktoum Airport. In addition to the Expo 2020, the new line will serve vital existing and future developments along its route, with a view to achieving project sustainability,” he explains. “The project’s catchment areas include vital urban development where the total population amounts to 270,000 people. The major developments within the Route 2020 catchment area include The Gardens, Discovery Gardens, Al Furjan, Jumeriah Golf Estates and Dubai Investment Park.” Starting off at Nakheel Harbour and Tower Station on the Red Line, the route will extend for 15km, of which 11.8km will be a viaduct and 3.2km will be underground track. In total, the project will encompass seven stations, including a transfer station with the Red Line. There will be two elevated stations and two underground stations as well. Speaking at the project announcement, Al Tayer explained that the RTA has mapped out a master plan for roads and transport projects to serve Expo 2020, with Route 2020 playing a prominent part. “The RTA has coordinated with all developers and government service providers of concern with the planned metro route, in order to ensure that Route 2020 will provide support to vital areas served by the project over the short and long terms.”
In profile
Younes points out that during the feasibility study for the project, the RTA worked with all concerned stakeholders to also ensure that proposed station locations were integrated properly within their urban settings and that they met the mobility demands within each particular location. This attention to detail also extended to the release
of the tender. The RTA has put in place governance and assessment principles for the Route 2020 project, to ensure transparency and achieve the best results. These include clearcut objectives and standards for the technical and financial assessment process during the tendering phase, says Younes. These standards cover several perimeters.
“The assessment process was based on the following: the project construction programme; the integration and linking of the systems with the existing lines of Dubai Metro; the station designs and modern project construction techniques, and finally, the rail technologies and systems that will be introduced to the project.” With the tender attracting 10 consortia of major firms that
specialise in the construction of metro systems, Younes says the bids were assessed through specialist committees, teams and international consultants, with 100 specialists from the RTA and the project consultant involved. “Five of them had submitted technical and financial proposals, and negotiations were made with two consortia in the final stage. The process concluded with the
“Route 2020 connects the Red Line from Sheikh Zayed Road to the Expo 2020 site near Al Maktoum Airport. In addition to the Expo 2020, the new line will serve vital existing and future developments along its route, with a view to achieving project sustainability” Assessment process The tender bids for the Route 2020 project were assessed by specialist committees, teams and international consultants, with 100 specialists from the RTA involved.
September 2016 23
In profile
awarding of the project contract to Expolink Consortium.” Regarding the funding of the Route 2020 project, the RTA says it is working in coordination with the Finance Department of Dubai Government, and that it has asked consortia to submit elective finance offers during the tender submission stage. The Finance Department will then select the most suitable finance model to achieve the present and future financial sustainability of the project. Route 2020 is clearly viewed as a crucial part of the Dubai 2021 Plan, which aims to see sustainable development with world-class infrastructure and services. It is also part of the RTA’s Strategic Plan 2021, which aims to provide mass transit systems, including the metro and Dubai Tram, buses and marine transit services. Therefore, it is crucial that all Dubai’s other transport networks and systems link up with the new route in an efficient and sustainable manner, says Nasser Abu Shehab, CEO of Strategy and Corporate Governance at the RTA, telling Big Project ME that accommodating the numbers predicted for the Expo alone is no easy feat. “Expo 2020 is anticipated to attract about 25 million visitors, 70% of whom would be coming from abroad during the duration of Expo from October 2020 to April 2021. The maximum number of visitors of Expo per day is expected to touch 300,000 visitors,” he says. Accommodating these massive numbers will obviously require thorough planning to ensure the smooth mobility and flow of people between the exhibition site and visitors’ places of residence. To achieve this, Abu Shehab says that Dubai will draw upon its rich legacy 24 September 2016
of successfully planning and managing major events, such as the hosting of the IMF and World Bank meetings, Dubai Airshow, Dubai Shopping Festival and the New Year’s celebrations, which are attended by around 1.7 million people annually, all assembled in a small area beside the Burj Khalifa. “As part of its preparations for hosting Expo 2020 in a style befitting the profile of Dubai, the RTA has developed a master plan for roads and transport services in support of Expo. The plan includes multiple transit options for lifting visitors from their places of residence to the Expo site – such as the metro, buses and taxis. “Considering environmental sustainability is one of the key objectives of Expo 2020, the
Thorough planning Nasser Abu Shehab, CEO of Strategy and Corporate Governance at the RTA, says that Dubai will draw upon its rich legacy of hosting international events to plan out the Expo 2020 thoroughly.
“Expo 2020 is anticipated to attract about 25 million visitors, 70% of whom would be coming from abroad during the duration of Expo from October 2020 to April 2021”
plan advocates the use of mass transit means, which are expected to account for 51% of the total number of trips from and to Expo. To achieve this, key measures have to be initiated, such as extending the Red Line of the Dubai Metro. In addition, more than 17 stations will be running Expo buses across Dubai, and these stations will be properly distributed to serve Expo visitors. Visitors will first head to those stations and from there they will be transferred by more than 500 coaches. “Coordination is in hand with other emirates to implement similar strategies for deploying a number of buses in each emirate to commute Expo visitors.” As part of the plan, some 30,000 parking spots will be provided within the perimeters of the site to serve visitors driving to the Expo site. From there, they will commute by bus. Furthermore, the Expo will also be served by 3,000 taxis, which will require parking areas and facilities. “The plan also envisages the construction of road networks and main interchanges to ease the accessibility to the site. The aim is to offer high flexibility in the entry and exit movements through multi-tier interchanges, which will allow the smooth mobility for all transit means needed to serve the Expo.” As such, Abu Shehab reveals that there are projects currently underway that will help streamline the two-way traffic movement of Expo 2020. A ‘radical overhaul’ of the Traffic Control Centre and the establishment of a Unified Control Centre is also planned. “The plan has taken into account utilising all the stated transport facilities and modes beyond Expo 2020 to serve Dubai and the economic and urban development projects, which will be constructed within and surrounding the Expo site”.
Site visit
Big Project ME visits the First Avenue Mall and Hotel in Dubai Motor City to find out how this retail and hospitality project aims to bring the surrounding communities together. Gavin Davids reports
in pole pos 26 September 2016
Site visit
ition September 2016 27
Site visit
B
ack in the late 1990s, just as Dubai was taking its first steps towards becoming the global mega-city it is today, no one would have imagined that there would be much life outside the city’s core areas. In those days, the city and its residents congregated around the creek, creating the bustling and vibrant districts of Deira and Bur Dubai. However, this growth came at a price, quite literally. As competition for living spaces became more and more intense, developers and residents alike began looking for new places to live. This led to the creation of what locals call New Dubai, which is anything beyond the Dubai World Trade Centre. As the years ticked by and the population of the city continued to grow, even these new developments became increasingly unfeasible, and people once again began looking for new areas to live. Where there was once nothing but barren sand, pockets of civilisation began appearing, creating residential communities of identikit villas and townhouses that formed satellite suburbs to Dubai’s main arteries. One such community is Dubai Motor City, a mixed-use development by Union Properties that is home to the Dubai Autodrome, residential units, retail outlets and business towers. While the Autodrome was completed in 2004, the completion of the rest of the development took a little longer, with handover of the residential units in UpTown Motor City only commencing in 2009. Even now, there remain elements of the community that 28 September 2016
remain uncompleted, with plans for a hotel and theme park left abandoned halfway through construction. Like many other projects in Dubai, the reason for the slow progress is the financial recession that shook the country in 2008/2009. Now, however, there are marked signs of progress, not just in Motor City but also in areas around it – Arabian Ranches has undergone an extensive expansion, while projects in Dubai Sports City continue to be completed at a rapid pace. Even further afield, developments like Akoya by Damac, IMPZ and Jumeirah Village Circle have seen tremendous progress over the last few years. These many residential developments coming up in the area are the reason that Saudi Arabian developer Al Tawfeeq for Development and Investment (ATDI) decided to enter Dubai’s retail segment for the first time. “Motor City by Union Properties is an attractive, emerging residential suburb in Dubai, with great attractions, such as the Autodrome and an upcoming theme park,” a spokesperson for ATDI says during a visit by Big Project ME to the site. “Introducing First Avenue
Construction around the clock Work on the project site continues in three shifts, around the clock, with 1,500 workers on-site.
ProjeCt DetAils Name of Project: First Avenue Mall and Hotel Project type: Mixed-use retail and hospitality Project Value: $55.05 million (estimated value) Client: Al Tawfeeq for Development and Investment lead Consultant: Dewan Architects + Engineers Main Contractor: Pivot Engineering and General Contracting MeP Consultant: IAN Banham & Associates Consulting Engineers interior Design: Intercon Fire and life safety: Locke Carey landscape Design: B&A Engineering total Project Area: 24,000sqm total Built-up Area: 43,000sqm scheduled Date of Completion: Q1 2017
Mall and Hotel to such a beautiful community with definitely add value to all stakeholders.” While the city already has an abundance of shopping malls and retail projects, ATDI believes the project it’s launching in Dubai Motor City will come to be vital for residents in the area. The First Avenue Mall and Hotel will focus on the upper middle-class to high-end segment of the market, offering a modern, familyfriendly space that will answer a number of residents’ needs. “We’re developing a stateof-the-art environmentally friendly retail and hospitality project to cater for the rapidly increasing number of households in the Motor City district,” the ATDI spokesperson asserts. “One bit of good news that I can share with families living in this area is that we’ve secured a wonderful retail mix, which will definitely make living more enjoyable in this part of Dubai,” he continues. Designed as a two-storey structure, the mall will have a built-up area of around 30,000sqm, says Abbas Saadoon, chief resident engineer for Dewan Architects, the lead consultants on the project. The total built-up area for the
Site visit
open spaces The mall has been designed to have an open feel to it, with access directly to the main street.
project will be 43,000sqm on a 24,000sqm plot area, he adds. “For the shopping mall, we have retail units, restaurants and coffee shops. Of course, there’s also landscaping for both mall and hotel – we have both hard and soft landscaping,” adds Saadoon. “The mall is two floors, with about 30,000sqm of built-up area and a 342-space carpark. Ongrade parking is 70 spaces, with bicycle parking also available.” “There are also a lot of terraces,” the ATDI spokesman adds. “It is an open mall, and while the fashion in Dubai (for these types of malls) is similar, I think that the other trendy malls that have opened are meant to attract tourists. This project is more for people actually living in the area. We’re a five days a week destination, unlike the other malls, which are weekend destinations.” With the hotel operated by the Radisson Group under the Park Inn brand, Dewan was keen to involve them from an early stage in construction, with Saadoon explaining that it was consulted during the design process with its specifications taken into consideration. Designed as a four-star hotel, the Park Inn will offer visitors a variety of choices, from 25sqm
“It is an open mall, and while the fashion in Dubai (for these types of malls) is similar, I think that the other trendy malls that have opened are meant to attract tourists. This project is more for people actually living in the area. We’re a five days a week destination, unlike the other malls, which are weekend destinations”
rooms to 52sqm suites. The fourstorey property will also have conference rooms and business facilities targeted at the various business surrounding Motor City. The hotel rooms will start on the second storey of the property, which will also contain a gym, spa and swimming pool on the roof. “We believe that there are a lot of businesses coming up in the area – IMPZ, Jumeirah Village Circle and Triangle, the media production zone and so on. These guys don’t have enough options for their meeting requirements or hotel stay,” says the spokesperson from ATDI. “The hotel is also coming up to cater to visitors of families in the neighbouring areas and for social events.” Coming to the construction of the hotel, Pivot Engineering and General Contracting was appointed as the main contractor, with Dewan Architects leading the construction programme and supervising works on-site, Saadoon says. “Dewan is the lead consultant for the project. We provide first of all the design to the client, and then the supervision. This project has been designed by us, with sub-consultants of course, as we’re not experts in landscaping and kitchens, or something like that. “How the scope of work goes
is like this: normally we get the tender and then invite all the contractors that we know as a consultant, ones that we’ve dealt with before. We send this list of contractors to the client and then they submit their bids. At the end of the day, the project was awarded to Pivot. The price is $55.05 million.” The project broke ground in Q2 2015, ATDI’s spokesperson says, adding that work onsite is progressing well, with the mall and hotel expected to be fully operational by the first quarter of 2017. “During Q4 2016, we will be very happy to hand over the units to our partner tenants in the mall,” he says. “We have completed the superstructure and we’re now doing the last touch-ups of the MEP connections. The last slab was casted a week ago [from the date of the interview] and now we’re doing the last touch-ups with regards to the swimming pool of the hotel and the snagging in the superstructure. This will be followed by the glass and aluminium installation, and then we’ll be ready to hand over to tenants.” Looking back at the construction of the project, both Saadoon and the ATDI spokesperson say the first challenge was the size and layout of the plot. While it was certainly a large space, the design team also had to contend with a kilometre-long stretch of main road running parallel to the site. Furthermore, because the mall and hotel are backed by the Dubai Autodrome, the design of the hotel had to be adapted to the shape of the plot, ATDI says. The upshot is that Dewan’s team were able to come up with a design both sleek and modern, inspired by the Autodrome flanking it. “We are blessed with having such a beautiful piece of land in Motor City. The design has been inspired by the shape of the land. Although it was September 2016 29
challenging to make the design as efficient as possible, we managed – through Dewan – to come up with a design that is visually impressive and modern,” ATDI’s spokesperson asserts. “If you look at this project, design-wise, it’s like a template for me,” adds Saadoon. “This building will be unique in this area. Honestly, I haven’t seen this design, with this shape of plot. The plot is very difficult actually, but the designer has done a good job on the view and façade of the project.” With the construction deadline not far away, of course, it’s important to ask what sort of construction methodologies were put in place for the construction programme. Both ATDI and Dewan were clear about taking a leadership role on the project, working together to ensure that the project and contractor faced as few delays and disruptions as possible. “To be honest, we have one of the best consultants in Dubai,” says the spokesperson. “Dewan are the designers and supervisors of the work, and we – as owners – are on-site every day. We’re not ‘supposed’ to be on-site every
PlANNiNG For sustAiNABility Sustainable design and
combined with low-flow toilets
construction is yet another
and showerheads, reduce water
important feature of the
use significantly compared
project, says Abbas Saadoon.
to a conventional facility.
“The Avenue Mall brings
Indoor environmental
together a set of techniques,
quality has been designed to
materials and technologies
ensure maximum occupant
which are suitably integrated within the project and contribute significantly to enhancing its environmental performance. “From the outset, the building optimises energy efficiency, limits water consumption, enhances indoor environmental quality and makes maximum use of recycled, recyclable and nontoxic materials,” he explains. The building’s energy system is based on optimising building orientation, installation of a highly thermal and tight envelope structure as well as paying significant detail to the
comfort via the reduction of airborne contaminants and controlling air leakage, as well as attending to other health, safety and comfort issues such as aesthetics, increasing natural ventilation and optimising thermal comfort, acoustics, provision of natural lighting, and creation of views to the exterior. The building materials have a high recycled content, are regionally available, need minimal maintenance and have low chemical emissions. Moreover, a construction
efficiency of the MEP equipment,
management and environmental
lighting systems and installation
plan is in line to reduce and
of a solar water heating system.
recycle 50% of waste along
Reduced irrigation through
with limiting the environmental
native, drought-tolerant plants
impact through the control of
and the use of a drip system,
noise, light, soil and air pollution.
day, but we have made ourselves available to ensure the solving of day-to-day operational issues, with planning and preparation.” “We’re not executing and finding problems and then solving them; we actually know what the problems will be ahead of time. Things are pretty much on autopilot mode at the moment, because we already know what we have to do. “For example, next month [September] we know that we have to connect Emicool. DEWA has already been approved and the plant rooms are under construction, while our major anchor tenants have been signed, with their construction and technical requirements incorporated. All of this is working in a network and we’re ensuring that the details are being taken into consideration ahead of time.” For Saadoon, being the senior resident engineer means he and his team have to keep track of what happens on-site. With a construction crew of 1,500 working in three shifts through the day and night, this means keeping a strict eye on the health and safety of everyone. “Regarding safety, as a Adapting to the land The design of the First Avenue Mall and Hotel was adapted to the shape of the plot it is being built on.
30 September 2016
Site visit
Keeping an eye on things As lead consultant, part of Dewan’s role is to supervise the construction process and to manage the workflow and coordination on the project.
consultant, we put that first. So far we haven’t had anything happen, but I personally believe that safety is very important and we try to communicate that. We do this by having toolbox talks and meetings with the contractor, and especially with the safety officers of the contractors and our own. By meeting and sending letters and NCRs and site instructions, we coordinate with the contractor (to ensure safety). As well as this, we also conduct routine site visits and give verbal instructions to the contractor. For the night shift, we put staff from Dewan on, but honestly speaking, that’s not much of an issue because there’s not too much work going on during the night,” he says. “Furthermore, we have a weekly HSE meeting where we raise issues. Here we also instruct the contractor to reduce the noise caused by using machinery (at night), as well as discussing logistical issues (related to this). The concrete in the pumps can be quite noisy, so we try to change the logistics (keeping in mind the residents). So far, we haven’t received any serious complaints.” 32 September 2016
“The design has been inspired by the shape of the land. Although it was challenging to make the design as efficient as possible, we managed – through Dewan – to come up with a design that is visually impressive and modern”
Saadoon adds that Dewan holds three meetings a week with the contractors and subcontractors on the project – one is technical, one is on progress of work and one is a safety briefing – where all targets and expectations are laid out. “We have technical meetings, especially for MEP. Our project is supplied by chilled water from Emicool, and of course it is also supplied by fire-fighting systems, because we have different systems. We also have electrical works, with the low current – CCTV and the public address – and we have light control, fire alarms and so on. So we hold a weekly technical meeting as well as a progress meeting, in addition to the safety meeting.” As a developer, ATDI also takes HSE very seriously, with the spokesperson explaining that it supports Dewan and the rest of the project team with any measures they wish to introduce. He adds that its presence on-site also allows it to help coordinate and manage the workflow. “The good thing about this plot of land is that the right side of the mall is vacant for us. So we’ve
been using that as a laydown area for the project. We also have good access to the site and we continue to cooperate with the RTA and the Motor City Community Management for the good flow of trucks and heavy equipment into and out of the site, without interrupting the residential experience of Motor City.” As the site visit draws to a close, the spokesperson from ATDI is keen to highlight a crucial aspect that allowed the project to be completed quickly, with relatively few hiccups. “We’re blessed that we’re constructing this mall in Dubai. Although the cost of construction is quite high – especially compared to Saudi Arabia – the clarity and efficiency of the system enables the contractors to execute major developments such as this project. “We have tens of subcontractors on-site, working side by side, hand in hand with the main contractor to finish the project on time. Everything, from cranes to blockwork, to concrete, to steel, to wood, all the major materials are available in Dubai, and because we have the funds available, we’re able to finish up ahead of time.” Given the need for a retail development like this in the area, finishing up ahead of time can only be good news for residents in the area. A fact that the spokesperson from ATDI is only too aware off. “I would say that we’re bringing a very exciting project to the area. High street brands and a contemporary hotel is what best describes the First Avenue project,” he says. “I want to tell families and tenants in the area that we’re bringing in a shopping centre and hotel to cater for their requirements, and we’ll ensure that they find what they want,” he says, concluding the tour of the First Avenue Mall and Hotel.
Comment
Heba Osman
To LiquidaTe or noT To LiquidaTe
Heba Osman, partner at Fenwick Elliott LLP, examines the challenges around the liquidation of bonds in construction contracts Construction contracts generally require contractors to submit a number of bonds (also legally known as letters of guarantee). A typical construction contract requires the contractor to provide the employer with an advance payment bond, a performance bond and/or a retention bond. The purpose of each bond is different; but for most these bonds are on-demand bonds and provide the employer with a fast and efficient remedy should the contractor default in carrying out any of its contractual obligations. These bonds are issued by banks on the request of 34 September 2016
the contractor naming the employer as a beneficiary and are regulated in the UAE by Federal Commercial Law No 18/1993 (the Commercial Code). The Commercial Code defines these letters of guarantee as: An undertaking issued by the guaranteeing bank on the request of his client to pay a certain amount (or an amount that can be ascertained) to another person (the beneficiary) without restriction or condition, unless the letter of guarantee is conditional, if [the bank] is requested to do so within the period specified in the letter of guarantee. The letter
of guarantee shall state the reason for which it is issued. A bond can therefore be a simple on-demand bond, or can be conditional, requiring the satisfaction of certain conditions before a payment by the bank is made out. The majority of bonds issued in the UAE are on-demand and may sometimes require a simple statement from the employer that the contractor is in default of its contractual obligations. The employer’s right to liquidate the bonds emanates from the construction contract itself and is tied to the occurrence of a specific default
on the part of the contractor. The employer therefore must consider carefully whether it is indeed entitled under the contract to liquidate the bond. These situations include the contractor’s failure to commence the works, progress the works in an efficient manner or rectify defects found in the works. However, with tight market conditions and many disputes arising between employers and contractors, the tendency to liquidate bonds without sufficient causation increases. If the contractor is not in default of any of its contractual obligations or if its default is not grave
Comment
an increasing tendency to liquidate With tight market conditions and many disputes arising between employer and contractors, the tendency to liquidate bonds without sufficient causation increases.
enough, the employer should consider carefully whether it indeed has a contractual right to liquidate the bonds. The fact that the bond is on-demand does not mean that it is free-ride; contracts are still required to be performed in good faith, and part of this good faith is not to use tools provided in the contract in bad faith. A liquidated bond tends to not only cause financial harm to the contractor, but also affect its ability to procure bonds for other projects later on, which means that a wrongfully liquidated bond is likely to cause a loss of profit to the contractor.
Regardless of the reason for liquidating the bond, the bank is generally not entitled to refuse the payment of bond amount once requested to do so by the employer. This is clearly provided for in the Commercial Code, which states that the bank shall not be entitled to refuse payment to the beneficiary for reasons relating to the bank’s relation with the client or the client’s relation with the beneficiary. This means that the bank cannot refuse to liquidate a bond on the basis that there is a dispute between the contractor and the employer. The bank is
“If the contractor is not in default of any of its contractual obligations or if its default is not grave enough, the employer should consider carefully whether it indeed has a contractual right to liquidate the bonds”
obliged to make the payment to the employer in accordance with the terms of the bond itself, and the bank may not consider the terms of the construction contract concluded between parties or in any way verify if there is indeed a default on the part of the contractor (unless the terms of bond itself require so, which is unlikely). If the contractor becomes aware of the employer’s intention to liquidate the bonds without justifiable grounds, a contractor in the UAE can have recourse to the summary court, seeking an order to stop the liquidation of the bonds.
However, the summary court would only grant such orders in exceptional circumstances, and if the contractor can show that its request has serious and specific reasons. There are a number of decisions issued by the Dubai Court of Cassation to the effect that “even though the issuing bank is obliged to liquidate the letter of guarantee upon the beneficiary’s first demand without need to obtain the approval or permission of the client, yet the law has allowed the client – who has a dispute with the beneficiary and fears that the latter may demand the bank to liquidate the letter of guarantee – to have recourse to the court to place an attachment order on the amount of the guarantee whenever this client has serious and certain reasons. The court would only order the bank not to liquidate the letter of guarantee on an exceptional basis and provided that grounds for such stopping of liquidation are present and are clear and evident from the documents of the case.” The Dubai Court of Cassation appears to also consider that the grounds of a request can be considered serious and certain if the works have already been completed, taking-over certificate has been issued, there are many unpaid certified payments, etc. Not all is lost once a bond is liquidated; the contractor’s recourse against an employer is then to pursue its claim (which in many instances would include loss of profit and/ or loss of reputation) in court or arbitration as the case may be. The cost of the wrongful liquidation then becomes higher to the employer. Therefore, the question remains: to liquidate or not to liquidate? September 2016 35
Construction technology
RecessionpRoof youR business
Ian Hauptfleisch, general manager of CCS Gulf, tells Big Project ME how his company’s cost control software can help contractors protect themselves in difficult economic times streamlining the process Construction professionals undergo training in the latest CCS software, which Hauptfleisch says can streamline all construction-related processes.
36 September 2016
With GCC construction companies focused on tightening budgets and cutting costs due to the overall slowdown in construction work across the region, the need for better control over project processes has become incredibly important.
Although cost control is not new to the construction industry, companies are now looking to incorporate digital technology into their processes, so as to improve functionality and efficiency. Using software that can be easily accessed by all stakeholders, whether on-site
or in-office, gives project teams a competitive advantage during the construction process. Not only do these tools record financial transactions that occur during the building schedule, they also allow managers to keep track of the progress and problems associated with a project. Given the current economic climate, a contractor armed with this information is more likely to succeed in an increasingly competitive environment. This is why Big Project ME spoke to Ian Hauptfleisch, general manager at Construction
Construction technology
Computer Software (Gulf ), to find out how contractors can use cost control software to effectively recession-proof their business. What does CCS offer to contractors looking to adopt cost control software?
Construction Computer Software provides comprehensive software solutions to the construction industry, specifically the general contractors. CCS, as we’re widely known, has two software product offerings, one being Candy and the other BuildSmart. Candy consists of integrated
and highly scalable modules for estimating, planning, forecasting, cash flow, on-site valuations and earned value management. Seamless integration of analytical estimating and critical path planning generates estimate forecasts and cash flows, while the valuations and earned value modules track and monitor progress and performance of the contract for the contractor. The Candy Construction estimating and project control system is an essential software application for the estimation, management and planning of all construction projects, from estimating through to tender award and, ultimately, final account. At the office or on-site, these systems streamline all construction-related processes, providing the accuracy and increased productivity required by construction professionals to improve margins, minimise risk and deliver on time. BuildSmart is a web-based ERP construction-orientated accounting and costing business solution, comprising integrated procurement, accounting and wages modules and a host of added features to cater for the specific needs of contracting companies, including plant, yard and store management, subcontract management, document control, business intelligence, HR, and time and attendance. In essence, CCS provides the complete construction enterprise solution through adopting a best of brands approach by integrating the essential elements of budgetary or allowable control and cost accounting to provide contractors with real-time, reliable, auditable, accurate and activity-based comparative analysis of costs and allowables,
“It is right now that all contractors should produce better estimates, and have closer control over projects and better monitoring of earned value and cash flows, for to rely on last year’s mind-set of a continual stream of work and bulging order books would be a dangerous folly” the essential information that determines the success or failure of a construction venture for the contractor. Why should contractors use this type of software?
Control is at the heart of profitability when it comes to construction, considering the number of variables, changes, people and equipment involved to undertake any construction project. Construction performance and progress cannot be monitored on financial
data alone, and engineering information is just as, if not more, critical. Engineering control includes generating and managing allowable and actual quantities of resource, wastages, man-hours of labour, production of equipment and time for construction activities. Historically, information has been late or nearly impossible to compare, as it comes from independent silos of information in the group. Estimators and accountants, after all, do not speak the same language. CCS products allow both to do their work in the language that is meaningful to them, and still produce the real-time reporting, comparing actual to allowable, that management needs. The critical touch points between Candy and BuildSmart allow accurate comparison of what is actually happening on a project to what was expected, all in real time. This is because BuildSmart’s architecture allows all cost information (payroll, plant, stock, yard stock, MRP, etc) to be entered once where the information is first produced (site, head office, yard, etc), and then to be managed through a single database for full integration and real-time analysis. Our extensive international exposure has allowed us to stay abreast of local and international trends and accommodate these within the software. Any user can request enhancements based on company or country specific requirements, and discuss details with the programming staff. Given the current economic climate in the GCC, especially in Saudi Arabia, it’s understandable if contractors look to ‘recessionproof’ their business. How can they go about doing this?
It is exactly at this time that
September 2016 37
Construction technology
Taking advantage of the slowdown The challenges presented by the construction slowdown actually work in CCS’ favour, as companies realise the benefits of proper control, speed and accuracy.
insufficient monitoring of project processes leads to uncertainties as to profitability. It is right now that all contractors should produce better estimates, and have closer control over projects and better monitoring of earned value and cash flows, for to rely on last year’s mindset of a continual stream of work and bulging order books would be a dangerous folly. At times like this, cash is king and CCS products are designed to give management the tools they need to control their cash effectively. The current global economic crisis highlights the consequences of laxity of control systems in boom times. It is precisely at these financially uncertain times that CCS can aid your decision-making processes, keeping tendering, procurement and numerous construction project variables under tight control, enabling better decisions with better information produced at the right time. Current conditions globally and in the Middle East
38 September 2016
“Companies have realised the inherent benefits of proper control, speed and accuracy required to make better decisions and execute the right actions, to minimise losses and maximise gains in a challenging market environment”
present various challenges, but also unique opportunities to streamline your business processes and controls. Has CCS noticed an impact as a result of the construction slowdown in the region?
Obviously, the less work contractors have, the less CCS systems are in operation. While BuildSmart, being a total business enterprise solution, is sold on a traditional licence plus annual maintenance method, Candy licences are not sold but rather rented on a monthly basis. The rental model helps companies scale their requirements according to the market conditions. Net sales, especially at the beginning of this year, were markedly down from record net sales last year. However, more as a result of returns associated with less/cancelled work and redundancies than lower sales. Companies are often caught in the so-called trap of having too much work and being too busy to look at and/or implement
software solutions, or they have too little work and are not prepared to take the financial risk of investing in software solutions, mistakenly alleged to be superfluous to their core business activity of construction. Many companies did however take the opportunity presented by the slowdown to consolidate and train staff to use the software properly and maximise on their investment. When the market does pick up again, they will be even better equipped to utilise the software tools to aid decisionmaking, accuracy and control to meet and better their margins. The challenges presented by the construction slowdown actually work in our favour, as companies have realised the inherent benefits of proper control, speed and accuracy required to make better decisions and execute the right actions, to minimise losses and maximise gains in a challenging market environment. The construction market in the GCC is still fairly traditional and set in its ways. How does a company like CCS compete with traditional models and mind-sets?
The relationship between man and machine is a tenuous one. Some of this tension stems from a reluctance to let go of the romanticised ‘good old days’ where paper was the undisputed king. In fact, these methods were inefficient, and projects and the preparation for them generally took longer than necessary. Things have changed considerably, and most would agree for the better. So from the beginning our direction has always been to service the construction industry needs with technology, rather than produce a generic software package. In other words, the
Construction technology
company emphasis is on people and their tasks at hand, not technology for its own sake. CCS Candy and BuildSmart together include modules for estimating, planning, valuations, forecasting, cash flow, procurement, accounting, wages, plant, yard and stock management, and document control. Separately these are available from a myriad of suppliers, but what distinguishes us from all other software offerings is the degree of interconnectedness of these modules. BuildSmart is unique and sets itself apart from your typical general accounting ERP systems in that it is customised and designed to cater for the unique demands of construction, where information is projectbased, needs to be tracked by activity as well as cost type, is extension into new markets CCS is planning to expand into new markets like Jordan, Lebanon and Kuwait.
40 September 2016
being produced and processed in many different locations, and is needed by management in real time for effective cost control. This highly scalable system seamlessly integrates all functions and stages of the construction processes and is entirely focused on and designed for construction – it is not a set of relational databases pressed onto construction people. Because the construction process is unique, complex and organic, and more crucially because CCS has developed and perfected this system for over 30 years through a highly interactive and consultative process with the industry, CCS manages the numerous links between all functions and all the people involved in the construction process in a systemic way, based on how these things were done manually.
“Control is at the heart of profitability when it comes to construction, considering the number of variables, changes, people and equipment involved to undertake any construction project�
Finally, what are your plans for CCS in the coming year?
The Middle East and North Africa still holds immense potential for us to expand our existing and new user base. Many users and organisations are also under utilising our software, and we plan to assist existing users to realise the potential and maximise on the capability of their investments. We also plan extensions to new markets like Lebanon, Kuwait and Jordan, which are experiencing increased construction activity. Being such an essential tool to most construction industry professionals, our most successful marketing strategy has simply been word of mouth, thanks to the many construction professionals recruited from companies and countries where CCS is used.
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Sustainability www.kone.ae
Following set guidelines The introduction of the Estimada code in 2008 was popular with property developers, as they could follow a set system that streamlined the implementation of sustainable building principles.
Saeed Al Abbar
Providing stronger green legislation
Saeed Al Abbar, chairman of the Emirates Green Building Council, examines the evolution of the UAE’s green building legislation and its future impact on the country The UAE has led the way in the region to provide stronger legislation which will see the country becoming more environmentally sustainable in its outlook for the construction and building industry. When the Emirates Green Building Council (EmiratesGBC) was formed in 2006, the goal was to advance green building principles that would eventually help protect the environment and foster sustainability.
Ten years later, we have seen great strides taken by the federal government as well as Dubai and Abu Dhabi government bodies to position the UAE at the 42 September 2016
forefront of a sustainable green building agenda. Legislation and policies implemented by the public sector have set the country on a strong path to achieving a sustainable built environment. Following the success of the Dubai Strategic Plan (DSP) 2015, the Government of Dubai released the new DSP 2021 in December 2014. The new strategy aligns with the UAE Vision 2021 and the Green Economy for Sustainable Development Initiative. The DSP 2021 also intends to build a strong and safe society within a sustainable and smart city. Similarly, the UAE capital too aligned its green programme
with the national agenda. Under the guidance of the Abu Dhabi Urban Planning Council (UPC)’s Plan Capital 2030, Abu Dhabi has focused on sustainable urban development with a concerted emphasis on preserving cultural heritage. With such initiatives, the UAE has made significant strides to drive the green building agenda and is now playing a global leadership role in creating sustainable cities for the future, with numerous ground-breaking frameworks and programmes being implemented by the public sector.
Green building policies
Following the launch of the Estidama framework in 2008, the UPC in Abu Dhabi mandated the Estidama Pearl Rating System (PRS) in 2010, addressing four pillars of sustainability: environmental, economic, social and cultural. This system found great resonance among property developers who were able to follow a set system that streamlined the implementation of sustainable building policies. The PRS is mandatory for all new buildings in Abu Dhabi. It is also the first sustainability rating system in the region where the PRS awards projects
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Sustainability www.kone.ae
systems and sets parameters for energy conservation, water efficiency, waste management and indoor air quality, among others. Its performance approach to achieving building efficiency and its methodology are similar to successful rating systems voluntarily practised by companies in the region. Another widely used rating system in the UAE, Leadership in Energy and Environmental Design (LEED), reveals that as of October last year, 142 buildings had been certified and 790 had been registered for LEED certification in the UAE. While this is a voluntary system, its global appeal adds to the policies laid down by government bodies. The trend of LEED-certified projects in the UAE demonstrates that the industry has followed government leadership by seeking to go above and beyond minimum legislative requirements. Existing buildings retrofit
at three different stages: design, construction and operation. The Pearl Operational Rating System (PORS) ensures that buildings operate efficiently and economically, while providing occupants with the highest standards of health and comfort throughout a building’s life cycle. At the same time that the UPC was putting its policies in place, Dubai Municipality began implementing Green Building Regulations and Specifications (GBR&S) on government-owned buildings in January 2011 and mandated the regulations for all new buildings in the emirate from March 2014. The objective of
these regulations was to enhance the performance of newly constructed buildings, improve public and environmental health, and improve the safety and general welfare of citizens. Among newer initiatives, the Al Sa’fat rating, a building rating system introduced by Dubai Municipality, is a significant initiative that will strengthen sustainable built environments in the city and support the goal of Dubai Plan 2021 to create a smart and sustainable city. It builds on the GBR&S for all new buildings in Dubai. Al Sa’fat is based on established green building rating
The Dubai Integrated Energy Strategy (DIES), created and managed by the Dubai Supreme Council of Energy, sets an ambitious target of a 30% reduction in energy demand in the emirate by 2030. A key element is a comprehensive programme which aims to retrofit a large portion of Dubai’s existing buildings to be more energy- and water-efficient. Over 30,000 buildings in Dubai were identified as having high energy-saving potential; based on this, several public and private initiatives were launched to engage in retrofit projects. The Dubai Regulatory and Supervisory Bureau (RSB) created a comprehensive legislative framework to facilitate private sector investment in energy-efficient retrofits. Etihad ESCO, a Dubai Electricity and Water Authority (DEWA)
venture, was also established in order to manage a comprehensive retrofitting programme for existing government buildings with the aim of creating a vibrant performance contracting market for energy service companies in the UAE. Etihad ESCO aims to generate 1.7TWh energy savings, 5.6IG water savings and 1 metric ton CO2 emissions reduction by 2030. In 2015, EmiratesGBC launched its Technical Guidelines for Retrofitting Existing Buildings, which too provide a set of retrofitting methods used to improve the performance of existing buildings, advance occupant comfort and increase building longevity. They also provide efficiency measures that can be used by building owners and end users when retrofitting property. A green future
His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, aims to make the emirate a global centre of green energy and economy, as indicated in the Dubai Clean Energy Strategy 2050. With an ambitious objective to become the city with the smallest carbon footprint in the world by 2050, His Highness Sheikh Mohammed’s plans are indeed a reflection of the government’s intentions to have a “greener country” through a “greener legislation”. Plans include the establishment of an AED 100 billion Dubai Green Fund, providing accessible financing for investors in the clean energy sector at lower interest. The achievements of the last ten years have been remarkable, and the UAE is clearly on a strong path to being a global leader in sustainable urban development. September 2016 43
Comment
Bernhard Niessing
The digiTal process
Bernhard Niessing, senior executive vice president, Process Industries and Drives at Siemens Middle East, discusses why digital technologies are the future of the construction materials industry Increased industrialisation in the Middle East is driving a significant economic transformation. While demand for construction materials fluctuates with economic cycles, we can be sure of one thing: the region will continue to grow, and the construction materials industry needs to be ready. Process industries, including the construction materials industry, are facing wideranging challenges. There is huge competitive pressure, often as a result of regulation changes, developing technology, fluctuating markets and shifting raw material values. 44 September 2016
Unpredictable energy prices, increased focus on emissions and – in some industries – production overcapacity mean that plant operators must find ways to be more flexible and efficient. They need to be faster to market, improve quality and lower costs. Maintaining high quality while keeping costs under control is a constant challenge, and the implications have a knock-on effect which is felt throughout the entire construction industry. Globally, the initiative towards increased digitalisation is known as Industry 4.0 or the Internet of Things (IoT). It’s about building a digital representation of a
The digital revolution Digital technology now allows companies to realistically represent highly complex infrastructure in 3D, building a fully detailed engineering model in the virtual space.
company’s entire value chain, creating a bridge between the real and virtual worlds and using digital tools to create real things. It’s about introducing customers to the digital enterprise – a central lever for boosting efficiency in a competitive industrial environment. The way we design, plan and construct process industry infrastructure is changing. No longer can we rely on building a plant and waiting until day one of operation to find out where the problems are. It’s expensive and inefficient. Digital technologies allow us to realistically represent highly complex infrastructure in
three dimensions, building a fully detailed engineered model of a plant in a virtual space. Virtualreality model-building allows you to walk through your plant in 3D – check the piping, use the stairs – before it even exists. And because it’s collaborative technology, all stakeholders – suppliers, contractors, OEMs – are brought together virtually, regardless of where they are. But what’s really smart is that this ‘digital twin’ allows you to simulate your entire process at this stage. You can visualise the flow of the product through the plant, optimising it virtually before any test run has been made. When
Comment
“No longer can we rely on building a plant and waiting until day one of operation to find out where the problems are. It’s expensive and inefficient”
the plant is built physically, the likelihood that you will need to further optimise processes is very low because from day one you already have a perfectly designed operation, ready to go straight into final production. Fewer changes to a plant’s infrastructure once it’s built means faster production and time to market, and lower costs. The operation, too, is revolutionised with digital technology. There are variables within the process industry that may be outside an operator’s control. The raw material for, say, a steel mill may change in composition following a change in supplier or based on
prevailing market requirements. Traditionally this would require a lengthy process of calibrating machinery to accommodate a different feedstock, followed by a series of test batches to ensure performance and quality levels remain high. The digital twin can alter the parameters of the feedstock, adjust the hardware settings and simulate the test virtually. Hardware is also getting smarter. Field sensors are monitoring hundreds of parameters across a plant’s operations, generating vast amounts of data from devices like gearboxes, motors and drives. They provide information about the condition of mechanical equipment, so that the process control system already knows the vibration and torque levels of a certain gearbox or motor, for example. So how do we turn this data to our advantage? You can only do this with software. Software is connecting these devices, enabling them to talk to each other via the cloud. Most importantly, it is taking the data and turning it into real, useable information for operators. At Siemens, we use Totally Integrated Automation (TIA) to bring all a plant’s operations together into one solution, which can be accessed and used all the way from the factory floor to the boardroom. This industrial automation describes the efficient interoperability of all automation components in a facility, covering the entire production process. The result is lower costs, greater flexibility, consistent levels of quality and reduced time to market. A perfect example of the value of TIA is its ability to build a predictive and optimised maintenance strategy. Traditionally, maintenance has relied on either operator
experience or manufacturer recommendation. If the system is able to give a real-time analysis of a device’s condition, why replace or service it when it’s running perfectly? If you know the condition of a device, you are also able to predict when it will need attention. Process industries such as steel and cement mills don’t have the luxury of being able to shut down individual elements – when you take a critical device out of the chain, the whole production stops. Performing analysis of the data generated by the operating phase allows users to develop a costeffective maintenance strategy, including predictive maintenance and planned shutdowns. Digitalisation has also created challenges of its own. Cyber security in the industrial sector is a very real concern for those involved in automation systems, as increased accessibility can reveal vulnerabilities. Minimising risk in cyber security entails both comprehensive security mechanisms and the integration of security activities into the whole lifecycle. Security considerations must be taken into account during development engineering phases as well as during service and operations activities, integrating physical security, network security, and system and software integrity. Our role at Siemens is to guide our customers through this transition. The transition towards a digital enterprise requires industrial software and automation, communication, security and services, and we have structured it in a way that companies are able to begin with any of these elements, at any point in the value chain, and scale up. The ultimate goal, of course, is to develop an ecosystem which uses digitally connected devices to drive efficiency, flexibility, quality and shorter time to market. September 2016 45
Solar case study First phase Noor 1 is the first phase of four linked megaprojects with a total investment of $9 billion.
46 September 2016
Solar case study
Solar Superpower
ACWA Power explains how the Noor 1 Concentrated Solar Plant will shape Morocco’s approach towards solar power, in this exclusive case study for Big Project ME
The trading city of Ouarzazate is known as the ‘door to the desert’, and its wild, remote location has provided the backdrop for film and television spectaculars like Lawrence of Arabia and Game of Thrones. Now it is also known as a global solar superpower.
Morocco is the largest importer of fossil fuels in MENA, importing 94% of energy as fossil fuels from abroad, with growing energy consumption in the horizon. By 2020, 42% of its electricity will come from renewable energy. In November 2012, MASEN and the consortium, led by ACWA Power, signed a Power Purchase Agreement for the value of $900 million for the sale of net electricity output from the Noor 1 Concentrated Solar Plant, for a contracted tariff of 18.9 US cents per kWh, the lowest ever ascribed at that time for CSP Technology. By mid-June 2013, the project had achieved financial close and begun construction, with the first phase becoming operational in late 2015. The speed at which the project of this scale moved forward emphasises the progress that can be made through the collaborative approach of the IPP model, and the agility and experience of ACWA Power to lead a consortium.
Noor 1 is the first phase of four linked solar mega-projects with a total investment of $9 billion. Its inauguration in January brought on stream a visionary and ambitious programme to provide nearly half of Morocco’s electricity from renewables by 2020, with some spare to export to Europe. When the Noor complex is complete, it will be the largest concentrated solar power (CSP) facility in the world. Noor 1 itself comprises 500,000 crescentshaped solar mirrors positioned in 800 rows to generate 160MW. ACWA Power has since achieved financial close of the Noor II & Noor III Projects, with construction underway to add another 350MW of solar power, and both are expected to be in commercial operation in late 2017. And when complete, with the addition of Noor IV, a PV plant, the entire complex will produce 580MW of electricity – enough to power a million homes. Its environmental impact stands to be significant, saving approximately 930,000 tons of CO2 per annum by providing an alternative energy source to the imported hydrocarbons that would have otherwise been used as the source of energy. Environment minister Hakima
“From the moment we place our capital in a country, we become concerned about the long-term health, wealth and happiness of the people, as it is only their success and prosperity over the next few decades that will allow them to afford the electricity that we are supplying”
September 2016 47
Solar case study
el-Haite says solar power will help drive Morocco’s growth, explaining that the Noor plant is the first flagship project in this programme and that it is already dispatching green energy into the system during the day and three hours into the night. The project also directly benefits the development of Ouarzazate province – one of the most disadvantaged regions in Morocco – by providing a foundation for the development of the local economy. In the next 25 years, the Noor complex itself will create thousands of local jobs and indirectly benefit many inhabitants by boosting the local economy. Beyond the green MWs, the direct benefit for the country Direct benefits The Noor 1 project will also have a direct impact on the development of Ouarzazate province.
48 September 2016
“We invest in the training and development of the local community to provide the necessary skills for plant operation and maintenance over 25 years”
and its people, the development of the Noor complex includes a significant component of activity to promote social and economic integration in the region and enhance the employability of local citizens. The ACWA Power community engagement team has launched a number of projects, including the training of skilled and certified welders, creating an arts and crafts collective for the production of traditional embroidery and ironwork for export, and training farmers in modern methods of sheep and crop husbandry to improve productivity and, in turn, raise incomes, all focused at improving the quality and standard of living of the local community.
Solar case study Training and development ACWA Power says that it invests in the training and development of local communities to provide the necessary skills to operate and maintain the plant.
Each project has been developed in conjunction with and with guidance from the local authorities, national training organisations and relevant government ministries, to ensure that they are appropriate and properly resourced to maximise impact on the local people. This successful example in Morocco demonstrates the benefits of inclusive growth models, which allow companies like ACWA Power to confidently invest in emerging markets to deliver the much needed electricity – and green electricity at that – to fuel economic development and the social wellbeing of communities and nations. “From the moment we place our capital in a country, we become concerned about the long-term health, wealth and happiness of the people, as it is only their success and prosperity over the next few decades that will allow them to afford the electricity that we are supplying and in turn enable our investment to be successful. Thus, for us,
our investment in community development initiatives is just that – an investment, and not a cost,” explains Paddy Padmanathan, president & CEO of ACWA Power. “We invest in the training and development of the local community to provide the necessary skills for plant operation and maintenance over 25 years, and it is an investment in nurturing local SMEs and education and healthcare facilities to drive social development and economic growth. “At the same time, the local communities invest their time and talent to acquire the skills and know-how to provide a brighter long-term future for them and their families, with the confidence that the growing economic activity in that locale will enable them to participate with this new-found knowledge and capability. It’s a perfect symbiotic union.” Through job creation, energy generation and reduction of Morocco’s carbon footprint, the Noor project will continue to have a positive socioeconomic
impact on the local community and Morocco as a whole for many years to come. In early February, just a month after the Phase 1 project started to dispatch electricity, Moody’s investor service issued their routine report on the credit standing of Morocco. Given that Morocco relies for 95% of its energy needs on imported fuel, all of it fossil, the analysis showed that the harnessing of significant renewable domestic energy resources is not only creditpositive from an environmental sustainability perspective, but also highly impactful, helping to permanently reduce Morocco’s balance of payment sensitivity to higher energy prices. Moody’s evaluation confirmed that from an economic perspective, 1 million TOE represents about 4.8% of energy imports in volume terms in 2015. At last year’s oil prices, the savings from reduced imports would have amounted to about 0.3% of GDP. A huge impact from just this one project.
September 2016 49
Show review solar revenue It is estimated that solar energy will generate $15 trillion in revenue over the next 15 years.
DEWA to host DubAi solAr shoW in octobEr
First ever Dubai Solar Show will be held in conjunction with the 18th Water, Energy, Technology and Environment Exhibition from October 4 to 6, 2016
Dubai Electricity and Water Authority (DEWA) is organising the first Dubai Solar Show, in conjunction with the 18th Water, Energy, Technology, and Environment Exhibition (WETEX 2016), which is organised under the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and under the patronage of HH Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance and President of DEWA, from 4 to 6 October at the Dubai International Convention and Exhibition Centre. Dubai Solar Show will cover approximately 10,000 square metres and will attract exhibitors from around the world. 50 September 2016
Analysts expect that by 2030, the solar market will increase ten-fold, and solar will become the dominant electricity source around the world. Solar energy is forecasted to generate $5 trillion in revenue over the next 15 years, displacing large amounts of fossil fuels. “The significant development of solar photo voltaic technologies, combined with 75% drop in cost over the past 10 years, have made it a popular option in various parts of the world to increasingly rely on solar energy. The cumulative capacity of solar energy now stands at about 185GW. Solar power additions in 2015 alone are estimated at about 50GW, up from 37 in 2014. This is clearly
reflected in the Middle East. According to the Middle East Solar Industry Association, only 70MW of solar PV projects were awarded between 2006 and 2013 across the region, while projects of 294MW were awarded in 2014 alone. This is a four-fold increase in demand for solar energy in one year compared to the seven previous years combined,” said HE Saeed Mohammed Al Tayer, MD & CEO of DEWA. “Dubai Solar Show will be a key platform for the public and private sectors to make deals, build partnerships, review the latest solar-energy technologies, learn about current and future projects in the region and market needs, and explore opportunities to take part in solar-energy
projects and programmes. Organising the show in conjunction with WETEX and the World Green Economy Summit is a chance to reach thousands of exhibitors, participants, officials, and decision-makers in the UAE, the Arabian Gulf, and the Middle East as a whole. Participants and visitors can avail of the busy agendas of the two events which feature conferences, workshops, and specialised activities. They can also meet experts and specialists from around the world to discuss developing solar energy and expanding its adoption in the region to achieve the sustainable development and ensure a sustainable future for us and for generations to come,” concluded Al Tayer.
Switching, protection and automation solutions at WETEX 2016 stand GSP-7 Visit our team of experts on stand GSP-7 at WETEX 2016 Lucy Electric are experts in secondary distribution network automation solutions with an extensive range that includes our Sabre SF6 insulated ring main unit with vacuum circuit break protection, ideal for indoor/outdoor compact substations and suitable for a range of applications. From retrofit solutions to the latest generation ring main units, remote terminal units and SCADA systems we provide network automation to meet the needs of today and the evolution of electricity generation in the future.
SCADA Automation
For more information on our solutions contact us on:
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Case study
RetRofit challenge Lucy Electric outlines how it resolved the challenge posed by Abu Dhabi Distribution Company’s plan to revamp the automation capabilities of its existing 11kV network
network distribution ADDC’s customer base consists of 412,540 service agreements for the supply of water and/or electricity, which is distributed to customers at the 33kV and 11kV levels throughout three regions.
52 September 2016
The customer
Abu Dhabi Distribution Company (ADDC) was established in November 1998 and is responsible for distributing high-quality water and electricity services to all customers in the emirate of Abu Dhabi, excluding the Al Ain region. ADDC’s core business is the planning, design, construction and operation of the Abu Dhabi water and electricity distribution network. ADDC’s customer base consists of 412,540 service agreements for the supply of water and/or electricity, which
is distributed to customers at the 33kV and 11kV levels throughout three regions: Eastern Region (Mussaffah and Baniyas), Western Region (Liwa, Silla) and Abu Dhabi Island. ADDC has serious ambitions for the widespread implementation of distribution automation across its operating area to enhance the service to its customers. Lucy Electric has been a key supplier of MV ring main equipment over many years to ADDC and a considerable proportion of
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Case study
the network is populated with our ring main units. The challenge
ADDC approached a number of RTU manufacturers for suitable solutions with the proviso that a turnkey package should be offered in terms of retrofitting automation capability to the existing 11kV network. The distribution automation (DA) strategy is to apply automation capability across the 11kV underground network in the urban conurbations and typically in the 11kV/LV substations.
Wi-Mesh, a wireless internet infrastructure, is being installed extensively throughout Abu Dhabi city and the emirate has been chosen by ADDC as its preferred method of communication. The existing distribution management system’s (DMS) inherent scalability is being used to ‘SCADA connect’ the 11kV/LV automated substations into this system once commissioned. Our Solution
There are typically two main configurations for the type of ring main units normally purchased by ADDC – the TRM and QRM, a 2+1 (ring switches and circuit breaker) and 2+2 respectively. These configurations are satisfied with the Sabre VRN2a (nonextensible RMU) and the Sabre VRE2a+VCE2a (extensible ring main unit and circuit breaker). To reduce the necessity for two types of RTU, a single remote terminal unit (RTU) format was designed to cater for the QRM and, by definition, the TRM. ADDC has therefore benefited from reduced stocking issues. The automated ring main units were equipped to include: Motorised actuation for the incoming ring switches (open and close operations) Shunt tripping for the transformer CB Protection relay alarms Transformer loading Earth fault detection Low gas pressure monitoring The Automation division within Lucy Electric liaised with ADDC to ensure that inter-operability was achieved with their existing DMS/ SCADA in terms of database and communication configuration and protocol. The IEC 608705-104 protocol was configured to ‘report by exception mode’
“ADDC has serious ambitions for the widespread implementation of distribution automation across its operating area to enhance the service to its customers” to reduce communication overhead with a ‘health ping’ to each RTU every ten minutes. Benefits
In order to protect ADDC’s original investment in Lucy Electric ring main units, Lucy Electric offered a service whereby existing Lucy Electric ring main units can be recovered from the network and refurbished at our manufacturing facilities
in Dubai and equipped with suitable automation facilities. The refurnished units can subsequently be returned to the 11kV network as fully automated ring main units with the necessary Gemini RTU, communication device and cabling. On-site installation times were minimised by plug-in connections between components and the Gemini RTU. ADDC’s contractors received full training on all aspects of installation and commissioning of the automated ring main units, and feedback on the ease of installation has been very positive. Installation works have continued at pace, with around 700 substations upgraded to automation by the end of 2014 – a considerable achievement given the original time scales, and still we are executing current orders. What does the future hold?
ADDC is looking to progress this work into its sister company, Al Ain Distribution Company, and a similar project approach for this phase of the DA rollout. For the time being, ADDC will use another IP-based communication system in GPRS with the potential to revert to Wi-Mesh once the network has been established. Fibre optic links are also deemed another potential communication media. It is clear that this substantial investment in DA will bring enormous benefits to ADDC’s customers in terms of supply security and availability, and provide ADDC with real-time data that can be archived for future network planning purposes. Having visibility and control of the 11kV network will also increase network operational flexibility, defer reinforcement investment, and reduce manpower and transportation costs.
September 2016 53
www.advantech.com
The future of Industry 4.0 and the Internet of Things (IoT) relies on powerful IT systems that can process and store the information in a fast and efficient manner from anywhere. Combining reliable and fast network connectivity, intelligent automation platform and gateways, flexibility and ruggedness automation controllers, IoT devices and sensors, with the IoT software framework - WebAccess - and having the ability to connect to the cloud for accessibility from other smart devices. Advantech is a pioneer of intelligent industrial automation and is committed to investing in R&D in new automation technologies, collaborating in vertical market solutions with partners and connecting industry Eco-partnerships through the WebAccess+ alliance program.
Global Certified Partner Network Advantech has formed strong and lasting partnerships with many well-established channel partners and solution partners to help provide complete solutions for a wide array of applications across a diverse range of industries. To realize our corporate vision of Enabling an Intelligent Planet, Advantech will continue collaborating and Partnering for Smart city & IoT Solutions.
With more than 30 years’ experience in providing a full range of products to different vertical markets, Advantech Industrial Automation Group is a leading global Automation Product and Services provider
Meeting the Energy and Water Demand in Middle East Demand for water and energy in the Middle East and North Africa is rapidly increasing. In WETEX 2016, Advantech will showcase its latest hardware and software portfolio of industrial solutions, focus on energy, water industries also infrastructures & Urban environment. We are looking forward to meeting you at our stand to see how we are building an energy efficient future!
www.advantech.com
Advantech Competence Center
Tel: +971 4 3434218
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Email: info@etek.me
Tenders
Top tenders SportS, AthleticS & AquAtic FAcilitieS project – SAbAh Al-SAlem univerSity city budget $545,000,000 project number WPR1083-K territory Safat, Kuwait client Kuwait University Address Building 119, 1st floor, Khalidiyah phone (+965) 2498 4271 Fax (+965) 2484 8648 email info@kuniv.edu Website www.kuniv.edu Description Construction of ten buildings comprising athletic, recreation and aquatic facilities period 2019 Status Current Project tender categories Leisure & Entertainment, Construction & Contracting tender products Sports Complexes
more than 2,000 vehicles period 2019 Status Current Project tender categories Construction & Contracting, Leisure & Entertainment tender products Retail Developments
Website www.pdo.co.om Description Construction of a new central processing facility period 2020 Status Current Project tender categories Gas Processing & Distribution, Oilfields & Refineries tender products Gas Exploration & Production, Gas Processing & Separation, Oilfields Exploration & Development, Refinery, Off-sites & Utilities
Website www.dipllc.ae Description Construction of a new hotel comprising 42 floors offering 438 furnished cabins period 2018 Status New Tender tender categories Hotels, Prestige Buildings tender products Hotel Construction
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budget $10,000,000 project number WPR1117-SA territory Saudi Arabia client Private Investor (Saudi Arabia) Description Construction of a shopping mall comprising a ground floor plus 6 floors period 2018 Status New Tender tender categories Construction & Contracting, Leisure & Entertainment tender products Retail Developments
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budget $300,000,000 project number WPR894-O territory Muscat 113, Oman client Petroleum Development Oman (PDO) Address Mina Al Fahal Street phone (+968) 2467 8111 Fax (+968) 2467 7106 email external-affairs@pdo.co.om
budget $90,000,000 project number WPR1130-U territory Dubai, United Arab Emirates client Dubai Investment Properties LLC (DIP) Address Office 401, Twin Towers, Deira phone (+971-4) 224 9222 / 224 9200 email info@dipllc.ae
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ArAimi boulevArD mAll project budget $120,000,000 project number WPR1034-O territory Muttrah PC 114, Oman client Al Raid Group of Companies (Oman) phone (+968) 2456 6557 / 4477 Fax (+968) 2456 7492 email alraid@alraidgroup.com Website www.alraidgroup.com Description Construction of a new shopping mall covering a built-up area of 128,000sqm with a lease area of 55,000sqm, including a car park to accommodate
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Tenders
Middle East tenders period 2018 Status New Tender tender categories Construction & Contracting, Medical & Healthcare tender products Hospital Construction
Saudi Arabia Al hoKAir hotel ApArtmentS toWer project budget $20,000,000 project number WPR1119-SA territory Riyadh 11584, Saudi Arabia client Al Hokair Group (Saudi Arabia) phone (+966-11) 413 4444 Fax (+966-11) 413 1111 email nfo@alhokair.com Website www.alhokair.com Description Construction of a hotel apartments tower comprising 2 parking levels, a ground floor, a mezzanine floor, a service floor and 18 additional floors period 2018 Status New Tender tender categories Hotels, Prestige Buildings tender products Hotel Construction
Qatar burj Al FArDAn project – luSAil
terminAl 6 project – King KhAliD internAtionAl Airport project number MPP3051-SA territory Jeddah 21165, Saudi Arabia client General Authority of Civil Aviation – GACA (Saudi Arabia) Address Bin Malek Street, Old Airport Area phone (+966-12) 640 5000 Ext: 2337 / 3368 Fax (+966-12) 640 1477 / 3876 email gaca-info@gaca.gov.sa Website www.gaca.gov.sa Description Construction of new terminal at an international airport, which will have capacity to handle
35 million passengers a year Status New Tender tender categories Airport, Construction & Contracting tender products Airports Development & Management
clemenceAu meDicAl centre project budget $35,000,000
project number WPR1122-SA territory Saudi Arabia client Clemenceau Medicine International (Saudi phone (+961-1) 375 475 email info@ clemenceaumedicine.com Website www. clemenceaumedicine.com Description Construction of a medical centre comprising 180 beds and 62 consultation units
budget $50,000,000 project number WPR1061-Q territory Doha, Qatar client Alfardan Properties Company SOC (Qatar) Address Alfardan Centre, Grand Hammad Street phone (+974) 4440 8308/8488 email afpleasing@alfardan.com.qa Website www. alfardanproperties.com Description Construction of a commercial tower comprising 3 basements, a ground floor, a mezzanine floor, 31 floors and penthouse period 2019 Status New Tender tender categories Prestige Buildings tender products Commercial Buildings, High-rise Towers
AnimAl meDicine proDuction FActory project budget $3,000,000 project number WPR982-Q territory Doha, Qatar client Ministry of Energy
INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS www.ccsgulf.com | Tel: +971 4 346 6456 | info@ccsgulf.com
58 September 2016
Tenders
& Industry (Qatar) phone (+974) 4484 6444 Fax (+974) 4483 2024 email dae@mei.gov.qa Website www.mei.gov.qa Description Construction of an animal medicine production factory period 2017 Status Current Project tender categories Industrial & Special Projects tender products Factories, Pharmaceutical Manufacturing Plants
UAE citymAx hotel project – Al bArShA budget $25,000,000 project number WPR1096-U territory Dubai, United Arab Emirates client Citymax Hotels (Dubai) Address Al Barsha, behind Mall of Emirates, Al Barsha 1 phone (+971-4) 378 2000 / 384 7132 / 409 8033 Fax (+971-4) 325 5849 Website www.citymaxhotels.com Description Construction of a new hotel comprising 2 basements, a ground floor and 14 floors period 2017 Status Current Project
tender categories Construction & Contracting, Hotels tender products Hotel Construction
jebel Ali cement FActory project budget $3,000,000 project number WPR1043-U territory Dubai, United Arab Emirates client Dubai Municipality phone (+971-4) 221 5555 / 206 3670 / 206 4552 Fax (+971-4) 224 6666 email info@dm.gov.ae Website www.dm.gov.ae Description Construction of a cement factory period 2017 Status Current Project tender categories Industrial & Special Projects tender products Cement Plants
Al mirFA hArbor project budget $25,000,000 project number WPR936-U territory Abu Dhabi, United Arab Emirates client Critical Infrastructure & Coastal Protection
Authority (Abu Dhabi) client Airport Road, Al Bateen Air Base phone (+971-2) 655 5555 Fax (+971-2) 655 0100 email info@cnia.ae Website www.cicpa.ae Description Harbour construction period 2017 Status Current Project tender categories Marine Eng Works & Seaports tender products Seaports
Oman ArAimi boulevArD mAll project budget $120,000,000 project number WPR1034-O territory Muttrah PC 114, Oman client Al Raid Group of Companies (Oman) phone (+968) 2456 6557 / 4477 Fax (+968) 2456 7492 email alraid@alraidgroup.com Website www.alraidgroup.com Description Construction of a new shopping mall covering a built-up
area of 128,000sqm with a lease area of 55,000sqm, including a car park to accommodate more than 2,000 vehicles period 2019 Status Current Project tender categories Construction & Contracting, Leisure & Entertainment tender products Retail Developments
Bahrain hoSpitAl project – King AbDullAh meDicAl city project number BPR725-B territory Manama, Bahrain client Ministry of Health (Bahrain) phone (+973-17) 288 888 Fax (+973-17) 246 245 Website www.moh.gov.bh Description Construction of a new hospital comprising 264 beds period 2019 Status New Tender tender categories Construction & Contracting, Medical & Healthcare tender products Hospital Construction
INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS www.ccsgulf.com | Tel: +971 4 346 6456 | info@ccsgulf.com
September 2016 59
Last word
Lighting the way Easa F Al Gurg, general manager of Scientechnic, talks about the impact the right lighting system can have on a building, and how his company put its knowledge to use on IMG Worlds of Adventure What are the major trends and requirements in the market today?
The breakthrough of LED technology is probably the biggest development in the lighting industry for decades. Due to massive energy reduction, minimal heat output, low maintenance and long life-span, LEDs have proven to provide the best return on investment. Our strategic partnership with renowned brands like ERCO, Osram, Lutron and similar brands have from the onset focused on solving the conflict between technology and qualitative lighting, enabling us to remain at the forefront of the LED lighting industry. Our goal is to serve the growing need for energy-efficient, sustainable lighting and smart control solutions. How do you work with consultants and contractors to achieve sustainability and green targets on projects?
60 September 2016
The concept of sustainability has become vital for success in the lighting industry, and 100% LED has now become a common practice in all projects. In order to meet green targets, we work closely with lighting consultants to match their original intent, design and quality with optimal solutions within their specified budget. Our team of lighting engineers is on a continuous quest to provide costeffective and sustainable selection processes without compromising the quality of the light solution. We also provide complete lighting schematics and layout plans based on clients’ required LUX levels. One such recent project is the IMG Worlds of Adventure theme park in Dubai. What has the Scientechnic team done specifically for this project, and what were the biggest challenges on-site?
We are extremely proud
to be associated with IMG Worlds of Adventure, as this project showcases our expertise in lighting solutions. Adhering to the short project time line and procuring alternative products while matching the unique technicalities of the project within the allocated budget were the
“The concept of sustainability has become vital for success in the lighting industry, and 100% LED has now become a common practice in all projects�
key challenges. For this project, we proposed a hybrid solution comprising European, Asian as well as local brands. Additionally, we also catered to the lighting controls requirement of various retail outlets within the project, using a Lutron Lighting controls system. This enables not only energy saving but also enhances the beauty of the project by incorporating different lighting schemes in terms of colour, intensity, design, etc. Moreover, it empowers the client to control all operations remotely from a single central hub. Finally, what are your future plans for Scientechnic? What new products and solutions are you looking to launch in response to client demands and needs?
The global lighting market is undergoing a rapid transformation, driven by technological change, and the rules of the game continue to change for
players across the industry. We have been systematically implementing a realignment of core focus in our lighting business. The greater life-span of LED in comparison to conventional forms of lighting will lead to lesser demand for lighting products in the near future. Hence we are keen to mainly focus on retrofit projects. Energy-efficient solutions are the new standard. Today, energy efficiency is an essential element of every home and business. We cater to every unique lighting control requirement, for residences, hotels, restaurants, retail stores, conference facilities, educational facilities, hospitals, museums and public spaces. In keeping with the rapid changes within the industry, we will continuously extend our investments in the lighting controls segment to facilitate new technologies in the market.
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