Big Project ME by Big Project Middle East

THE BUSINESS OF CONSTRUCTION www.bigprojectme.com

MAY 2013

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CONTENTS

MAY 2013 07

The Big picture

Saudi government cancels Jizan economic City jv

MMC Corp and Saudi Binladin Group sees joint-venture

cancelled over disputes

News analysis

Cost of the world

Examining the cost of Qatar hosting the 2022 FIFA World Cup

16 In profile Legacy Man

New CEO Hasan Abdullah Ismaik’s vision for the future of Arabtec

Site visit

International rescue On-site at the Muscat International Airport expansion project site

30 Consultants A question of pedigree Consultants talk about being more than the middle men

38 Recruitment Dial M for manpower Is the region falling behind in the global recruitment race?

48 Construction Finance Lessons from the east What can the Middle East learn from the Far East?

Special feature - energy saving

plug the leaks

Building envelope experts on the growth of air-tightness testing

unsung heroes

Can FM companies help ensure the efficiency of buildings?

70 Comment

The maturing dispute resolution market

DLA Piper’s Keith Kilburn and Thomas George on arbitration

Tenders

Qatar tenders

Work on the expansion of Muscat International Airport is on track for its 2014 finish date.

82 Constructive criticism Look at the big picture Gavin Davids says tough calls need to be made to follow up on

new initiatives from the Urban Planning Council in Abu Dhabi

MAY 2013

MIDDLE EAST

PAGE 22

Big Project ME lists some of the biggest tenders in the region

EDITOR’s COMMENT

M MIDDLE EAST

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Doha grounded SO NOW WE know the name of the airport formerly known as the New Doha International Airport and we know why it failed to open in April.

Publisher Dominic De Sousa GROUP COO Nadeem Hood Managing Director Richard Judd EDITORIAL GROUP EDITOR stephen white stephen.white@cpimediagroup.com +971 55 795 8740 deputy EDITOR GAVIN DAVIDS gavin.davids@cpimediagroup.com +971 4 440 9118 features EDITOR JONATHON SAVILL MARKETING & ADVERTISING

The $15.5 billion, 22km airport was due to open on 1 April but was unable to meet Qatari civil defence building codes. According to the head of Qatar Airways the reason his planes have to continue to use Doha’s existing and creaking airport is because the contractor Bechtel had been ‘complacent’ in meeting ‘all the regulatory requirements’ mandated by the airline and Qatar’s Civil Aviation Authority. 2

Talking to a journalist on the sidelines of an event in Chicago, Akbar Al Baker complained of the San Francisco contractor: “They have to be blamed…for our delay in the first place.” While the finger of blame is firmly being pointed at Bechtel, you do have to wonder whether it should take full responsibility for this slightly embarrassing episode. Remember this was a project that was supposed to be $13 billion cheaper and finished by 2009. In reality the project has been beset by a variety of problems beyond the issues created by the global economic downturn. In fact one of my favourite anecdotes about Doha – and one that worries me in terms of how the World Cup construction will proceed – was the one I was told about how the design kept on changing every time an airport show was on. No wonder it’s four years late. For all the noises of responsible and careful construction coming out of Doha, I hope that this serves as a reminder that everyone will need to be on the same timesheet if we are going to complete the 2022 construction on time and vaguely on budget. Whatever that will be.

Stephen White

Group Editor

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MAY 2013

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THE BIGGEST PICTURE

Joint venture for $30 billion Jazan Economic City cancelled by Saudi government

MMC Corp and Saudi Binladin Group have the rights of their joint venture terminated over ‘difficulties that interrupted the progress of the project’ big project, big numbers $30bn Total cost of Jazan Economic City Nov 2006 Date the JV was awarded the contract 117km2 Total size of the mega-project 30 years Total time frame for project 725km Distance from Jeddah

MMC Corp Bhd, the Malaysian construction firm, has said that the Saudi government has terminated the rights of its joint-venture with Saudi Binladin Group to develop the $30 billion Jazan Economic City. The company said it will be engaging consultants to provide advice on matters relating to the project termination and compensation, a Reuters report said. The Saudi Arabian General Investment Authority awarded the project to a joint venture between MMC and the Binladin Group in November 2006. “The termination was as a result of circumstances which gave rise to several difficulties that interrupted the progress of the project,” MMC said in a local stock exchange filing on Monday, without detailing the “difficulties”, the report said. “Until the status of the termination is clearer, the board is not in a position to determine precisely the impact on the group’s future earnings,” MMC said.

According to local media reports, Jazan Economic City was 30% complete as of September 2010. The project would have been Saudi Arabia’s fourth economic city after King Abdullah, Prince Abdul Aziz bin Mousaed and Madinah. The economic cities are being built to attract domestic and foreign investment into industry and businesses in Saudi Arabia. They are part of the Kingdom’s attempts to diversify its economy away from oil. Jazan Economic City is located 725km south of Jeddah, by the Red Sea. It encompasses industrial and nonindustrial zones on a site measuring approximately 117km2. It will be developed over 30 years. Jazan is home to Saudi Arabia’s third most important port on the Red Sea. The Economic City focuses on four main areas: heavy industries, secondary industries, human capital and lifestyle.

MAY 2013

MIDDLE EAST

big project ME interviews hasan abdullah ismaik, the ceo and managing director of arabtec, on page 16

THE BIG PICTURE

bigprojectME.com

DSI awarded $49 million MEP contract in Qatar Work on project due to start immediately, with completion set for Q4 of 2014

Q1 2013 sees 36% jump in Bahraini real estate growth Measures taken by government help regain the trust of investors and real estate developers A survey released by Bahrain’s Survey and Land Registration Bureau has found that real estate trading in the Kingdom has grown by 35.61% in the first quarter of 2013, as compared to the same period last year. A local media report said that total trading volume reached $502.54 million during the first three months of 2013, thanks to favourable climates prevailing in the country. Furthermore, measures taken by the Bahraini government helped regain the trust of investors and real estate developers, the report said. In December of 2012, Bahrain’s Shuara Council said that it would spend $1.54 billion over the next two years to build 16,000 housing units across the country. The plan is part of the Ministry of Housing’s long term goal of building more

than 50,000 units in the Kingdom. It is also part of the decision to clear applications that had piled up over the last few years, a Council member said at the time. Earlier in the month, Bahrain’s sovereign wealth fund said that it was considering investing in some of the country’s stalled property developments to help kick-start the property market again. Mahmood Hashim Al Kooheji, CEO of Mumalakat, said that the company’s real estate arm, Edamah, would invest in partially completed projects if they were commercial viable. Four significant projects that he said the company was looking at were: Bahrain Bay, Marina West, Marina Reef and the Villamar residential complex. All have been stalled since the onset of the financial crisis, he added.

Drake & Scull International, the regional construction contractor, has signed a $49 million MEP contract for a residential development in Qatar, the company announced last month. Work on the project is due to start immediately, with an estimated completion date in the fourth quarter of 2014. DSI operate across a number of disciplines, including Civil Contracting, MEP, Water and

36% Bahrain real estate growth in first quarter of 2013

Power and Rail. Zeina Tabari, chief corporate affairs officer, said that more details on the project will be released shortly. Earlier this year, the contractor’s Doha subsidiary, Drake and Scull Qatar, was awarded an $82 million contract for the design, supply, installation and commissioning of all MEP works at a mixedused real estate development project in Doha. That project would cover substructure and superstructure works within a 260,000sqm built up area that encompassed three superblocks. Various structures such as residential buildings, schools, utilities and office buildings were also included in the contract.

Makkah Governor launches Phase 1 of Turba university project Prince Khaled Al Faisal chairs meeting of local council during tour of city Makkah Governor, Prince Khaled Al Faisal has launched the first phase of a university campus project in Turba, it was announced on Monday. The governor also chaired a meeting of the local council in Turba and discussed various development projects required by the Saudi Arabian city. New projects include a 200-bed general hospital and nine health centres, a report in Arab News said. The Prince also visited Messan, another town in the region and discussed its development requirements with officials. In its 2013 budget, the Saudi Arabian government announced that it would spend the bulk of its $218.7 billion budget on education and healthcare development, which represents 37% of the overall spend.

MIDDLE EAST

consultants give big project me their views on the local construction industry on page 30

MAY 2013

THE BIG PICTURE

Qatar asks construction firms for safety plans Preparations for work for World Cup 2022 begin to step up in pace The Qatari Labour Ministry has asked all construction firms in the country to update the ministry with their safety plans and requirements every six months, so as to avoid hazards or penalties. The Qatari government is looking to step up on-site safety as the pace of construction is set to rise in the country. “We are asking company heads to update us with a copy of their safety plans which include staff training courses to make sure workers are protecting themselves and their environments by using safe procedures, as well as job hazard analysis, in full detail so that we can approve their practices for utmost safety,” said the manager of the Labour Inspection Department (LID) at the ministry, Khaled al-Ghanem. “Company safety plans submitted to the ministry by contractors or consultants must also include job hazard analysis or risk assessment so workers know the risks they are taking in their jobs so they can be more cautious,” he added.

2022

Saudi governor announces $4.2bn funding for 513 Taif projects

FIFA WOrld CUp

Qatar is stepping up construction safety regulations for the event

159 projects have been completed, with another 288 under construction and 66 approved, Taif governor Fahad bin Abdulaziz bin Muammar says

199 education projectS 5 Technological projectS 33 Water projects 89 Road projects 36 Planned healthcare projects 16 Completed healthcare projects

Otis plans to step up Saudi recruitment drive Elevator company celebrates 160 years in operation, and 30 in the Kingdom Having recently won six contracts in the King Abdullah Financial District in Riyadh, the Otis Elevator Company is to increase the Saudi staff on its roster. “We’ve got a lot of very good projects in Saudi Arabia,” said Adel Eissa, general manager of Otis Saudi Arabia. With more than 60,000 employees and operations in 200 countries, Otis is poised to push forwards with projects in the GCC, with a particular focus on KSA. Eissa also announced that there are plans afoot to train and employ young Saudis over the coming months. These

would be run in conjunction with a national campaign to train young Saudis and encourage students to work in the private sector. “We have around 50% Saudisation and we believe there is nothing more pressing in the Kingdom than preparing Saudi young men and women for the future. We are keen to see Saudis employed in all fields. It takes a leading role in training young Saudis to make them eligible and capable of meeting the demands of the market,” he said. “We’ve developed a centre of excellence for major projects in the Gulf.”

MAY 2013

MIDDLE EAST

big project me investigates how recruitment companies go about their business on page 38

THE BIG PICTURE

KSA moves to appease Ethiopia over dam criticism

bigprojectME.com

1,836 cases

Deputy Defence Minister’s comments provoke outrage from Ethiopia

MIDDLE EAST

The Saudi Arabian government has made an official statement rebuffing remarks made by the Kingdom’s Deputy Defence Minister against the construction of Ethiopia’s Grand Renaissance Dam. Khalid Bin Sultan had said that the Horn of Africa nation posed a national security threat to Sudan and Egypt by building the massive $4.8 billion hydropowered dam along the Blue Nile. He added that the Ethiopia power plant project was ‘intended for political plotting, rather than for economic gain.” The remarks caused the Ethiopian government to react with anger and summon the Saudi Arabian Ambassador to Ethiopia for an official explanation. The Saudi Ambassador was quick to decry Sultan’s comments and insisted that they were not representative of the Kingdom’s government. KSA’s Foreign Ministry echoed the Ambassador’s explanation, releasing a statement that clarified that the comments made by the ambassador: “do not reflect the official stance of the Government of KSA.” Despite strong protests from downstream countries of Sudan and Egypt - who argued dam would reduce the flow of the water to their territories - Ethiopia launched construction on Africa’s biggest dam in March 2011.

MAY 2013

Number of cases settled by abu dhabi labour courts in 2012

Abu Dhabi labour courts settle 1,836 cases amicably in 2012 Reconciliation and Settlement Committees settle cases worth more than $3.4mn over last year 6,991

Total number of cases seen in 2012

99.8%

Case settlement rate in 2012

4,318

Cases were plaintiffs and defendants failed to strike an accord

518

Cases filed with primary labour courts in 2012

2012

528

Cases filed with primary labour courts in 2011

1,836

Number of cases settled in 2012 involving workers

$3.4 million

Amount paid in settlement over the course of 2012

2011

Nakheel tenders DragonMart2 contracts Two new contracts up for tender, developer says

$272 million Cost of Dragonmart2 project

Nakheel is in the process of tendering new contracts for the DragonMart mall expansion in Dubai, the managing director of Development, Projects Logistics and Shared Services at Nakheel has said. Speaking during a conducted tour of the construction site, Engineer Mohammed Rashed Bin Dhabeah told Big Project ME that the project would look to tender major contracts between March and April. The man overseeing the $272 million project added that the tender bids were currently in progress. “We have awarded three major contracts (so far) – the shopping mall construction contract, the car park

contract and the hotel. We have more to be awarded: the plaza; the landscaping and for the mechanical units,” he said. The mechanical units include chiller and pumping systems, Dhabeah added. “There are two packages, one is for the plaza and one for the central utilities plant. The consultant is Dar Al Handasa,” he said. Nakheel is expanding the DragonMart shopping complex, which is located on the Oman-Hatta Highway on the outskirts of Dubai. The total built up area of the mall will be 175,000m2. It will have a three star hotel on the premises and will have a multitude of retail and leisure facilities on-site.

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THE BIG PICTURE

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Sharjah to spend $952mn on compensation for development projects Amount to include compensation for the demolition of old non-traditional buildings

Mazaya Qatar to tender Marina Mall contracts

$952.8 million has been set aside by the Sharjah Directorate of Town Planning and Survey to compensate those affected by development projects in the emirate from 2007 to 2012, said Salem Al Suwaidi, director of Financial and Administrative Affairs and Public Relations. During a meeting of the Sharjah Advisory Council, Al Suwaidi pointed out that the amount included compensation for the demolition of old non-traditional buildings. He added that historic buildings were identified and would be turned into museums as part of the Directorate’s plans to revitalise 13 areas of downtown Sharjah. Furthermore, there are plans to develop the commercial and industrial zones of Al Dhaid. The East Coast city of Khor Fakkan would see an ‘urban renewal project’, he said. The limits of the heritage zone in Khalidiya have been increased and work is underway to revive the old market and neighbourhood of the heritage buildings, Al Suwaidi said.

CEO says that company in negotiations to sell Gloria Hotel property and main contractor set to named

MIDDLE EAST

Mazaya Qatar Real Estate Development, the Shariah-compliant real estate company, will announce tenders for the Marina Mall project, which will be constructed in Lusail City. The company was also set to ink a new deal to sell one of its properties, Gloria Hotel, a senior company official said. “We are expecting to strike a deal to sell the Gloria Hotel. But we are still negotiating; it is yet to be finalised... And as far as the Marina Mall is concerned, we are in the tendering stage to choose a main contractor, which will be announced within a month,” said Seraj Al Baker, CEO of Mazaya. The Marina Mall project is part of a 30 year agreement between Mazaya and Qatar Foundation to develop and manage the $274.6 million shopping centre, on a build, operate and transfer basis. Once completed, the project will

MAY 2013

extend over 57,605m2, with two floors and a ground floor. Al Baker added that as part of its expansion plans, the company had acquired a 30,000sqm plot of land near Doha Festival City. This would be for the development of a commercial complex. “The project will be a multiuse commercial complex including a gas station, hotel, offices, and residential units. Currently, we are at the discussion stage with the local municipality,” he explained. Mazaya Qatar, listed at the Qatar Exchange, acquired Gloria Hotel a couple of years ago as part of its strategy to diversify its income generating portfolios and assets. The company, with over $274 million in capital, was risk averse about venturing into new real estate projects due to market conditions after 2008, and its deposits in banks were not yielding good returns.

Etihad Rail link to Dubai under tender First phase of the expansive national project is expected to be completed this year A national network will decrease the emirate’s dependence on increasingly busy highways, and could help GDP growth. 1,200km Total length of the rail project

$952.65 mILLION projected contribution to the UAE’s GDP by 2030

transport centres located in Abu Dhabi

2014 Start of operations for Phase 1

main transport centres located in DUBAI

THE BIG PICTURE

Qatar’s Cash splash Big Project ME breaks down Qatar’s public spending in the build up to the 2022 World Cup and beyond

Qatar’s real GDP set to rise on the back of infrastructure development in 2014 - QNB Qatar National Bank report says that public spending on infrastructure will fuel economic growth

As the first quarter of 2013 drew to a close, Qatar announced the largest budget in its history, allocating $57.9 billion for spending for the year 2013/2014. The tiny Gulf state is set to splurge the cash on a variety of projects, ranging from public projects to education and healthcare to infrastructure. Here are a breakdown of the facts and figures.

Ballooning Budget

Real GDP growth

6.2% Amount allocated for public projects

Amount allocated for public projects

Construction sector growth

10.6%

Share of non-oil and gas sector in overall economy

Manufacturing sector growth

Non-oil and gas sector growth

11.8%

10%

Transport sector growth

12.1%

42.2%

Controlling costs An EC Harris report has said that Qatar can control an expected inflation of construction costs by smart planning and heeding the lessons of neighbouring countries. amount allocated for public spending for the year

amount allocated for public spending for the year

PERCENTAGES

$15 billion

Per annum forecasted value of the Qatari construction industry in 2021

$ 6 billion - $9 billion GROWTH FROM THE PREVIOUS YEAR’s BUDGET

Predicted average expansion of Qatar construction market on a yearly basis

growth from 2012 for education projects

Expected construction inflation during the World Cup (2016 -2019)

Present spare capacity in the Qatar construction market

increase in spending on healthcare from 2012

MAY 2013

MIDDLE EAST

of budget dedicated to public projects

Forecasted value of the construction material market in Qatar over the next two or three years

NEWS ANALYSIS

bigprojectME.com

Cost of the World With the cost of building materials predicted to rise in Qatar as preparations for the 2022 World Cup heat up, Big Project ME looks at the price Qatar will have to pay for the World Cup

MIDDLE EAST

s preparations for the 2022 FIFA World Cup rumble on, Qatar is faced with dilemmas on a number of fronts while it seeks to prepare itself for what will be the biggest event in its history. These encompass not just the actual construction development that needs to be done, but also applies to legislation and economic planning for the future. According to a report compiled by EC Harris, the tiny Gulf Arab country is set to see an ‘explosion of construction activity over the next decade’. While this is undoubtedly excellent news for construction firms looking to get work in Qatar, it would serve them well to be cautious about the way they proceed forwards in the Gulf Arab country.

MAY 2013

With Qatar set to see the value of its construction industry double to almost $15 billion per annum in real terms, the unprecedented growth could have major implications on the cost of construction. As such, the EC Harris report predicts that construction inflation could reach as high as 18% per annum over the next 10 years.

This could add billions of dollars to the cost of building Qatar’s future, it said. Furthermore, this cost could see the construction market overheat, leading to serious pressure for both the client and the supply chain, said Terry Tommason, partner and head of Property and Social Infrastructure, Middle East, at EC Harris.

“Although many of the existing Qatar construction firms are currently reporting spare capacity in their order books, this will not be sufficient for the volume of construction that is forecast.”

NEWS ANALYSIS

Legal requirements The construction and logistical supply side of the World Cup preparations are not

“A fast-track construction dispute resolution scheme called ‘Q-Construct’ is being considered”

the only issues that the Qatari government has to concern itself with, according to Keith Kilburn, senior legal consultant in the Litigation and Arbitration team at DLA Piper. As the pace of construction continues to build, it is likely that the need for swift dispute resolution is also going to increase. The last thing contractors, developers, suppliers and consultants will need is their projects being halted while lengthy court battles are being fought. Therefore, Kilburn said that the Qatar government has begun examining proposals about introducing a fasttrack scheme that aims to resolve construction-related disputes. “A fast-track construction dispute resolution scheme called ‘Q-Construct’ (is one such proposal being considered),” he told Big Project ME. “It is intended to be available to all Qatari and international companies engaged in construction and engineering projects,” he added. “The scheme involves Dispute Adjudication Boards providing a streamlined dispute resolution process, with oversight provided by the Qatar International Court. The Q-Construct scheme is a recognition that large-scale construction projects, such as those for the 2022 World Cup, cannot be delayed where disputes lead parties to resort to protracted legal proceedings.” “A key feature of the Q-Construct scheme is that the decision of the adjudicator, whilst interim in nature, is binding, meaning that parties can still resort to other dispute resolution procedures, but must in the interim, comply with the decision,” he explained. It is clear then that the Gulf country is doing everything within its power to ensure a smooth build up to the World Cup. Whether it will actually be all smooth sailing, only time will tell. n

Qatar World cup growth figures n $15 billion Predicted value of construction per annum

n 18% Predicted increase in construction inflation over the next ten years

MAY 2013

MIDDLE EAST

keith kilburn

With such a wide pipeline of construction, the major constraint on development will be the capacity and the capability of the existing supply chain. As the report stated: “Although many of the existing Qatar construction firms are currently reporting spare capacity in their order books, this will not be sufficient for the volume of construction that is forecast.” One of the most widely recognised problems facing Qatar is the development of infrastructure to facilitate the logistical challenges that the World Cup will bring. An early assessment of the impact of logistical requirements, by EC Harris, shows that although there is sufficient freight capacity planned, thanks to significant investment into air and seaport infrastructure; the issue will lie in whether they will come on-stream in time to meet the peak demand for construction materials. Additionally, as construction productivity increases, the demand for labour will rise to the tens of thousands, which would necessitate a rethink, both from an entry visa perspective as well as accommodation and welfare. Thus a coordinated approach should be taken by the government to ensure a steady supply of materials. Not only will this help control inflation, but a centrally managed logistics strategy will make the most effective use of resources.

IN PROFILE Hasan Abdullah Ismaik

bigprojectME.com

Legacy

Man

MIDDLE EAST

Big Project ME talks to Hasan Abdullah Ismaik, the new CEO of Arabtec, about his growth strategy for the UAEâ&#x20AC;&#x2122;s largest publically listed construction contractor

MAY 2013

IN PROFILE Hasan Abdullah Ismaik

with formulating an expansive growth strategy for Arabtec, while at the same time overseeing an overhaul of the contractor’s management team. Shortly after Ismaik was appointed as CEO of Arabtec, he oversaw the appointment of Shohidul Ahad Choudhury, a former Deutsche Bank executive as the contractor’s Mergers and Acquisitions head, Mark Andrews, former managing director of Murray and Robert’s Middle Eastern operations as chief operating officer and Iyad Abdelrahim as chief financial officer. “Arabtec is expanding the company’s management team to ensure that we have the right skills and experience in place to drive our growth and achieve the optimum returns for our shareholders,” he explains. “We have appointed our head of M&A, COO and a new CFO for our construction business. We also have some new members which we will announce as soon as we are in a position to do so.” “We believe that the new management team and ownership structure bring significant international experience and knowledge in the real estate and construction sectors that will enable us to achieve our new growth strategy,” he says. “Our new strategic direction is driven by several key points including the opportunity to grow the business in different sectors and markets,” Ismaik adds. “Moreover, we are increasing the diversification of our business to build revenue and reduce counterparty and

arabtec numbers broken down n $1.8 billion Amount to be raised in capital through rights issue and convertible bonds

n $37.89 million 2012 net profit figures

n $60.19 million 2011 net profit figures

n $1.5 billion 2012 total revenue

n $4.87 billion 2012 backlog

Hasan abdullah ismaik CEO and managing director of Arabtec Holding.

“Arabtec is expanding the company’s management team to ensure that we have the right skills and experience”

MAY 2013

MIDDLE EAST

he day after the news broke that Riad Kamal had resigned from his post as chief executive officer at Arabtec, there was a distinct rumble in local stock markets as shares in the UAE’s largest publicly listed construction firm fell to a six week-low over fears of a significant shares dilution. With the contractor looking to raise $1.8 billion in capital through a rights issue and convertibles at the time, it’s hard not to think that the abrupt departure of the founder of the company had something to do with the uncertainty surrounding the Dubai-based construction company. Throw in the fact that the firm’s 2012 net profits had tumbled to $37.89 million from $60.19 million in 2011, and it’s safe to say that Arabtec wasn’t having the best of times in the first quarter of 2013. So it was quite the situation that Hasan Abdullah Ismaik walked into, having been appointed as Arabtec’s new CEO at the start of March this year. Having already been a member of the board since August 2012 and already in place as the company’s managing director, it was a natural progression for him to step into Riad Kamal’s considerable shoes. “I am the founder and chairman of the Abu Dhabi-based HAMG Group, an investment company that includes Marya Development and Real Estate Investment and Marya Investments and HAMG General Trading,” he tells Big Project ME. “I’m also the chairman of Al Ashmal Real Estate Investment Company in Jordan and Hirmas Investments Group. Additionally, I head a diversified investment portfolio that spans several sectors, including energy, real estate, construction, transportation and architectural design services.” As he brings such extensive experience to the table, Ismaik has now been tasked

IN PROFILE Hasan Abdullah Ismaik

MIDDLE EAST

market risk. The company’s growth strategy will be carried out through organic growth, acquisitions and international joint ventures.” As part of its growth strategy, the company will look at opportunities for expansion in the oil and g as industries, power and infrastructure, as well affordable housing. This could lead to exploring new markets with ‘strong potential’, Ismaik says, pointing out that India is an interesting option for the firm. Part of the new strategy, he says, is to focus on expansion in markets outside the UAE, which wasn’t really a priority for the previous iteration of the company. As such, markets such as Qatar, Saudi Arabia and Kuwait will be increasingly targeted. This changing focus was clearly evident in the announcement of a $631 million contract that was signed with Qatar’s Msheireb Properties in December. Hasan Ismaik’s influence was already evident in the deal, which saw the contractor agree to the construction of a built up area of approximately 370,000m2. Comprising of ten buildings between two and 19 storeys high, the massive project is part of the development of Phase II of Msheireb Downtown Doha. “Qatar is an important market (for us),” he says. “We’ve extended our presence in Qatar, which is likely to continue being a key market for the company in coming years.” “In addition to our focus on the GCC region, Arabtec is looking to develop projects in India, building on our position there. Our interest in these markets are not short-term priorities, but are based on long-term focus as they offer significant growth opportunities through strong trading ties between the two countries that can be leveraged on,” Ismaik asserts. “We are currently conducting in-depth research of market opportunities in the two countries, and will begin to look at the possibility of joint ventures with strong local partners.” “As I mentioned earlier, our new strategy also looks at expanding into oil and gas, energy and infrastructure EPC. They are all growth areas in the Middle East and of vital economic importance to the region. They are a natural extension of the specialisms that we have in the

MAY 2013

bigprojectME.com

“We are increasing the diversification of our business to build revenue and reduce counterparty and market risk”

Midfield terminal Arabtec is part of a consortium building the Abu Dhabi Midfield Terminal.

Expansion plans Ismaik plans to push Arabtec into new markets like Qatar and India.

business and they are all experiencing long-term growth.” “In addition to our broad knowledge and expertise, these factors pose an ideal opportunity for Arabtec to move into these sectors.” “For example, in April of this year, Arabtec Holding and Samsung Engineering Co, Korea’s largest engineering company, announced the signing of a Memorandum of Understanding (MoU) for a new joint venture company. The joint venture will be called Arabtec-Samsung Engineering, and will be incorporated and headquartered in Abu Dhabi,” he says. Arabtec will be a 60% shareholder in the new company, with Samsung Engineering holding the remaining 40% interest. The new JV will exclusively undertake large-scale projects in oil and gas, power and infrastructure in the Middle East and North Africa region. As significant as this overseas progress is, it doesn’t obscure the focus the contractor has towards its domestic market. Having positioned itself as the predominant construction company in Abu Dhabi and Dubai, Ismaik is determined to build on the work his predecessor has done. “Arabtec’s current backlog of approximately $5.9 billion includes works on the Louvre Abu Dhabi, the Fairmont Abu Dhabi, and the recent contract award for the Midfield Terminal Building at Abu Dhabi International Airport,” he says. “Today, we have over 42,000 employees and have our name on several world renowned iconic buildings such as the Burj Khalifa, Emirates Palace and the Louvre Abu Dhabi and Msheireb Downtown in Doha, Qatar. Arabtec has built seven of the world’s tallest structures, and over 12,500 villas in the last decade alone.” It is because of these projects that Ismaik feels that Arabtec could continue to go from strength to strength in the UAE

Project Qatar, stand no Y-33, May 6-9, 2013.

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IN PROFILE Hasan Abdullah Ismaik

bigprojectME.com

market place. He points out that there was a 15% rise in revenue and a sharp increase in contracts awarded in 2012, which signalled a strong emergence from the regional downturn in the construction industry. “The company reported total revenue of $1.5 billion in 2012, compared to $1.33 billion in 2011. Our backlog grew to $4.87 billion, an increase of 27% compared to 2011. In 2013, our backlog has continued to grow, and now stands at $5.82 billion,” he says. “The construction market in the UAE is doing very well in recovering from a trough in the business cycle. Work on projects, is now back in full force and investor confidence in the property market is seen to have increased over the past year,” he continues. “(In fact), the global construction market has returned to growth. The current new wave of growth is expected to continue for the next seven to ten years powered by government spending on infrastructure,

“The construction market in the UAE is doing very well in recovering from a trough in the business cycle”

MIDDLE EAST

gradual improvement of liquidity, sustained low interest rates, and the continuing growth of city populations.” According to Ismaik, global spending on construction is forecast to grow by an average of 6% – 8% per year for the next five years. “In the GCC, a total expenditure of $172 billion is expected in 2013, the equivalent of several GCC States hosting World Cup tournaments at the same time,” he asserts. So then what lies ahead for Arabtec in 2013 and beyond, given the considerable amount of work on its plate? With projects such as the Louvre Abu Dhabi in the bag, Ismaik says that the focus is likely to be on finalising joint ventures similar to the Arabtec-Samsung Engineering arrangement over the coming year.

MAY 2013

Massive Backlog Arabtec’s backlog, which includes the Louvre Museum, now stands at $5.82 billion.

With clear signs that the construction industry is picking up across the GCC, industry analysts have stated that the project-driven MENA region’s oil and gas, power and infrastructure sectors are likely to be key drivers of long-term economic growth in the region. “The major projects market in the Middle East in oil & gas, power and infrastructure is gaining momentum with the region’s 100 biggest schemes currently under construction accounting for more than $304 billion of capital spending in 2013 alone,” he remarks. “Activity in these sectors in 2013 and beyond is set to increase dramatically. Meanwhile, the top 50 projects currently planned or already under way across the region are valued at $1.6 trillion, representing a 42% increase compared to 2012.” He then adds proudly: “We have achieved a high degree of success with 37 consecutive years of profitability and a reputation for high-quality workmanship, (and we’re determined to continue that).” Barely two months into the top job at Arabtec, it’s clear then that Riad Kamal’s legacy is in safe hands. n

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MIDDLE EAST

ON SITE NEW MUSCAT INTERNATIONAL AIRPORT

MAY 2013

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Project Name

Muscat International Airport Expansion

Location

Muscat, Oman

Site Area

334,995m 2 (Terminal Building)

Building type

International Airport

Construction cost

$5.2 billion

ON SITE NEW MUSCAT INTERNATIONAL AIRPORT

International

RescuE

Big Project ME flies into Oman to see how Hill International is rescuing the troubled Muscat International Airport project. Jonathon Savill and Gavin Davids report It was here that Hill International entered into the picture, beating rival firms Dar Al Handasah and AECOM Middle East to the $108.5 million, twoyear engineering consultancy contract. As such, the US-based international consultant has quite the job on its hands, a fact acknowledged by Adel Merhi, project director of the Muscat International and Salalah Airport projects, and vice president at Hill International. “This is the most strategic project in the country, I believe” he tells Big Project ME during a tour of the project site. “(In fact) this is one of the biggest projects that Hill has undertaken, possibly the biggest. Not in terms of the volume of work, but in the complexity of the project and the challenges that come with it.” “We came on board in early January 2013. The previous engineer and designer were managing this project. There was some fallout between the engineer and the client and they are no longer here. Part of the problem was that there were delays on the project and also cost overruns.”

MAIN AND STANDARD CONTRACTS AWARDED n Project Management Adpi

n Principal Consultant Hill International

n Civil Works

CCC-TAV JV

n Air Traffic Control Carillion Alawi

n Terminal Building Bechtel-ENKA-BEC

n Civil Aviation HQ

Towell Construction

n Boarding Bridges

JBT Corporation

“This is one of the biggest projects that Hill has undertaken, possibly the biggest. Not in terms of the volume of work, but in the complexity of the project and the challenges that come with it”

MAY 2013

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ver the last decade or so the GCC construction industry has narrowed to focus to fixate on the major markets of the UAE, Saudi Arabia and Qatar, relegating the rest of the Gulf countries to bit part players in the tapestry of the Middle Eastern market. While the attention of the construction world has remained on the major players, intelligent construction firms have been keeping an eye on other emerging markets in the region, waiting for the right time to make their move. None of these so called ‘secondary markets’ are as important as the Sultanate of Oman, the GCC’s second largest country by land size and the third largest by population. Recognising this fact, the Sultan of Oman, HH Qaboos bin Said Al Said and his government have begun pushing through a number of vital infrastructure projects that will help the country’s steady growth over the coming years, if not decades. One such project is the $5.2 billion expansion and modernisation of the Muscat and Salalah International Airports. Considered one of the biggest construction projects in the history of the Sultanate, the two expansions will see passenger handling capacities jump to 12 million and 2 million respectively. The projects were originally tendered to Cowi-Larsen, but in September of 2012, the Omani Tender Board abruptly announced that it would not be renewing its contract with the Danish construction consultant, and would instead be putting it out for tender.

ON SITE NEW MUSCAT INTERNATIONAL AIRPORT

MIDDLE EAST

“We came over and mobilised close to 320 people in a very short period, and contributed towards streamlining the processes and resolving a lot of problems with interfaces. “We also resolved a lot of technical issues and while we’re still facing a lot of problems, we’re trying to manage them in the best way possible,” he tells Big Project ME during the tour. Clearly then, there’s a lot of work to be done, but it’s a challenge the Hill team is relishing, says Darioush Aryanpad, the Engineering and Interface director on the massive project. “Imagine a train that’s derailed and going downhill, that’s what we jumped in to and tried to (bring under) control and put in order. We then take it from there, that’s the challenge we’re facing,” he says. “You’re not brought into a project like this as a consultant, as we were, when there are no challenges. Our task was to come and deal with the challenges and solve the issues. There are always challenges and there are always things for us to do. It’s a very complex project.” Part of the complexity of the project is that there are so many ‘packages’ to cover. These packages cover various facets of the airport’s construction schedule, from building a new terminal, to a new runway that will link up with the existing one, to building a new air traffic control tower. Furthermore, facilities and operational systems will also need to be built, including passenger boarding bridges, baggage handling systems and cargo and maintenance hubs. “Here in Muscat, we have various packages and each package has various milestone dates, so you can see within one package, maybe there are some milestones finishing earlier than other packages,” says Merhi, as he outlines the challenges facing Hill International. “In total, there are two phases, Phase 1 and Phase 2. Phase 1 is the runway completion, and Phase 2 is the overall completion.” “The problem to start with, is that the project itself is massive. There are many packages, many programmes and on top of it, we inherited a lot of problems on the job. We inherited many problems and luckily, so far, we’ve done very well in

MAY 2013

bigprojectME.com

“Imagine a train that’s derailed and going downhill, that’s what we jumped in to and tried to (bring under) control and put in order. We then take it from there, that’s the challenge we’re facing”

Package projects There are a number of projects underway at the same time on site.

putting out the fires on a few packages. We still have problems on other packages, but we’re steadily moving forward and will overcome them,” he adds. Although the project isn’t as large as airports like Abu Dhabi and Dubai, the Omani government is far more ambitious in terms of the way it is releasing its construction packages, say the men overseeing the project. “In comparison to other regional airports; hardly any of them have been as ambitious as this one when it comes to releasing so many of the various packages, as one,” says Merhi. “In almost every other airport, things are done phase by phase by phase. If you look at the various components and put them in a sum, probably it’s not as comparable in size to other airports, but if you look at the challenge of putting it all together at once and sending it out, I

ON SITE NEW MUSCAT INTERNATIONAL AIRPORT

bigprojectME.com

would suggest that very few airports deal with such an ambitious programme in such a short time frame and this airport has to be compared with very few in the world,” he asserts. With construction scheduled to be completed in 2014, the challenge of hitting that date is immense. But that doesn’t mean that the consultant isn’t well prepared for what’s in store for it over the next two years. “Is the project on schedule?” muses Aryanpad, when asked if Hill will be able to meet the scheduled finish date. “Not based on the previous schedule, but we’re making sure that it will be, once we set a new timeframe. We’ll make sure that this is the schedule that will meet the target,” he insists. “A logical and rational time-planning is in order, we’re putting it in place and we’re following it from here on. We’ve got all the mechanisms to basically materialise this time-scale that we have, in

“In comparison to other regional airports, hardly any of them have been as ambitious as this one”

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the best possible way,” he adds. Merhi points out that there are 25,000 workers on the project, a huge number. Although the majority of them work during the day, the main contractor for the terminal building, a joint-venture between Bechtel-ENKA-Bahwan Engineering Company, has been working night shifts to complete the building on schedule. “The construction of the runway, will be finished by the end of the year. Then there will be some certification process with ORAT, Operational Readiness and Testing, and that will take probably another four months,” he says. “There are different dates floating in the market, and some of them have been announced by the minister, there are different interpretations of what those dates exactly mean,” he warns, adding that the different projects on site are at different phases, but maintains that the project will

MAY 2013

OTHER CONTRACTS AWARDED n Dredging works Boskalis Westminister

n Water Channels Desert Line Projects

n Rader Installation Raytheon

n Rockfill for runway Galfar E&C

n Water pipelines

Al Matar Company

n Ground Improvement Solitanche Pachy

be completed on time and on schedule, despite all the challenges that are in place for the consultant. “Hill International was appointed for its ability to deal with issues of this magnitude and projects of this size, and given the conditions (this project) is at. It’s not a surprise, but there are things that are unforeseen and they come back and get thrown at you, and you just have to deal with it,” he says emphatically, leaving no doubts about his company’s ability to pull of one of the most impressive rescue jobs in its history. n

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CONSULTANTS IN FOCUS

MAY 2013

bigprojectME.com

CONSULTANTS IN FOCUS

A Question of

Pedigree

Big Project ME asks consultants from across the construction industry to examine the challenges facing the region and identify the core issues that need to be addressed if progress is to be made

“You want a contractor who’s a team player, that’s part of a team. You’re not looking at someone who’s claims conscious.

By opening the doors of communication, consultants allow for clarity and cooperation to flourish on complex projects, smoothening the way forward. However, to cast them solely as intermediaries between two factions is to do disserve to their work. A good consultant is one who not only oversees the completion of a project, but one who helps foster coordination and manages a project, says Steve Garbe, a project director with Faithful + Gould. “We’ve always maintained that it was important to have a lot of cooperation and to work closely together. Figuring out when things could go wrong, potential areas for problems, it’s an essential part of doing business where there’s lots of things going on and things change all the time, it’s having that cooperation to actually amend things, change them around, push things back,” he explains during an interview with Big Project ME. “You do that by talking to them all, not necessarily by having a go at them when they’re late, but talking to them and finding out how you can resolve it, how you can help them by working somewhere else (on the project),” Garbe asserts. Cooperation and teamwork are an essential component of any successful project, agrees Mike Berry, a director with CKR Consulting Engineers. He points out that it’s essential to make sure a consultant gets the right contractor on board, because a construction team is only as strong as its weakest link.

mike berry

anil menon

MAY 2013

MIDDLE EAST

s the construction industry has grown and evolved over the years, operating practices and systems have continued to evolve with it, driven by technology changes and the adoption of new methods and processes. Driving this change has been the consultants who are appointed to oversee the projects and help guide both developers and contractors down the best path to a successfully completed project. Imagine an industry without consultants. Clients and contractors would be left in a state of limbo, constantly struggling to achieve their targets, while also looking to keep prices down. This creates a situation where they’re frequently at odds with each other, which in turns leads to claims being brought or countered and the project being stalled delayed while half complete. It’s a rather terrifying prospect, isn’t it? With that scenario in mind, it’s easy to see why consultants are often cast as the ones ‘who bring balance to the force’, so to speak. Serving as a go-between between a client and contractors is no easy task, but it is a vital one.

CONSULTANTS IN FOCUS

MIDDLE EAST

“You want a contractor who’s a team player, that’s part of a team. You’re not looking at someone who’s claims conscious. Someone who under-prices the tender merely to make claims later to make up their shortfalls,” he says. His partner, Anil Menon, also a director at the consultancy, says that one of the things CKR does to ensure the smooth operation of a project is to assume responsibility of appointing the MEP contractor for the projects they’re working on. This is to ensure that the right contractor is chosen for the project and to pre-empt any potential problems along the way. “What we do as MEP consultants, we ensure that we dictate that the MEP contractor is to be nominated. Although the clients may be looking at a one-stop solution, where they’re wanting the main contractor to take the entire responsibility, what we want to do, with MEP being a very important and high-priced contract, we’d like it to be nominated so that we, being the client’s representative, can be part of the process of choosing the MEP contractor,” he explains. “The MEP contractor definitely needs to be a proven player, it needs to be financial stable,” Menon says. “If you don’t have a contractor who is respected in the market, you’ll find that the supply chain will be choked. If the supply chain gets choked, then your construction on-site is choked and the project gets delayed. “So you need a contractor who’s got an influence on the supply chain, gets the best price; because if he gets the best prices, then the client gets the better pricing,” he says. Cost has always been a major factor in deciding how a project is developed. For a long time, the attitude amongst developers towards construction veered towards getting the lowest price possible, often at the expense of build quality. Andy Hewitt, a construction contracts and claims consultant with almost 40 years of experience in the industry, says that this attitude is a common cause of problems on-site. “I think this part of the world tends to think that you can buy quality cheaply and I don’t believe that’s the case. I see a lot of poor consultants, because they work on a tight budget, and I also see

MAY 2013

bigprojectME.com

“If the client buys the design cheap, then there are going to be design errors, that’s inevitable. On a construction project there are going to be omissions in the design”

choosing a contractor n Experience Make sure you pick a proven player

n Respect A contractor that is respected in the markert is vital

n Influence An

influential contractor can help cut costs

n Team player Pick a contractor that will work with you

supply chain Choosing the right contractor can have a major impact on a project’s supply chain.

a lot of good consultants that are not allowed to provide a good service, either because the fees they’ve been paid don’t allow them to employ better people or enough people. I actually think that the way the consultants are bought certainly does not allow for the quality of service,” he says. “If the client buys the design cheap, then there are going to be design errors, that’s inevitable. On a construction project there are going to be omissions in the design, but you know, I often see huge errors of omission in the design, which is often the cause of delays and of course extra work. And this is where the claims start coming in and everybody gets unhappy and starts to throw their toys out of the pram.” The regional leader for the Middle East at EC Harris John Williams says that pricing has to be done sensibly, or the pre-2008 mistakes could be repeated.

CONSULTANTS IN FOCUS

bigprojectME.com

Assessing the market n Diversified The local

construction market is changing

n Technology Buildings are becoming more technologically rich

STEVE GARBE

n Realistic Clients are

more realistic about what they want

n Demanding Clients

want more value for their money

“Regardless of the competitive nature of the market and whether or not things are won on price alone or qualitatively as well as price, I think there needs to be a very clear understanding of what it is people are trying to achieve,” he says. “One of the things I’d say is, at this stage, I still get the feeling that enthusiastic optimistic programmes are being submitted, potentially at the same price, and the market is encouraging that as well, because it’s still quite competitive.” So how does a consultant choose the right contractor for a project then? Given that there are so many issues to keep an eye on, consultants tend to stick to what they know. A contractor’s past plays a major role in determining its future. “In any situation or scenario, track record and past experience still goes

MIDDLE EAST

“We’ve always maintained that it was important to have a lot of cooperation and to work closely together. Figuring out when things could go wrong, potential areas for problems Is an essential part of doing business”

MAY 2013

ahead of many other things. ‘You’re only as good as your last job’ is the go with your gut answer that most people would immediately give you,” says Williams. “The market is becoming more diversified, the buildings that are being requested are more technology-rich. So I think that relevant expertise in a particular type of sector or project might be something that would be considered. A track record of commercial awareness and commercial agenda (is necessary).” Menon agrees and points out that experience isn’t only confined to the contractors on-site. One of a consultant’s most important jobs is to sign off on installations, and he says that this is often where clients and contractors tend to cut corners on projects. “Although there are strict approval processes from authorities, when it comes to onsite inspections, you can’t expect the authorities to come and inspect every nut and bolt. I think, somehow, the clients interpretations and aspirations vis-à-vis bringing in an international consultant or policing the procedure during design, doesn’t really get translated as such during the supervision. So supervision is thinner than design, if I may say,” he warns. “When you talk about design, you’ve got highly experienced looking at it. But when it comes to supervision, they say, “I’ll just a few inspectors and the

John williams

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CONSULTANTS IN FOCUS

bigprojectME.com

With awareness of green building increasing, a string of specialised consultants have been employed to work in energy auditing, commissioning, energy modelling and sustainability consulting. “There is no doubt that sustainability is something that is gathering tremendous pace throughout the Middle East,” said AESG director Saeed Alabbar.

MIDDLE EAST

contractor would do the work”. So there’s not much policing, I would say.” “We tell the clients that you don’t need ‘bums on seat’, you need managed supervision, where you get an experienced guy to set foot on site. The reason they don’t want that experienced guys to come onsite is because experience comes with a cost.” “But it’s like an experienced doctor. You want an experienced doctor to come and give you advice, you pay a doctor for that, right? So what we’re saying is, ‘don’t pay him for full time, but bring him once in a month or something. An experienced inspector, who has clocked years of experience, one look and he can pick up on things.” With the pace of construction picking up in the UAE, it’s clear then that consultants have their work cut out for

MAY 2013

them. While none of the experts Big Project ME spoke with expected there to be a dramatic upswing in business, they were optimistic about the prospects for the industry. A common theme, however, was that the mistakes of the past needed to be learnt from, and going forward, the industry itself needs to embrace best practices and drive itself forward; starting with the consultants themselves. According to Menon, consultants must define what the client’s needs are and how the project will be delivered. “What’s very important is to be very clear on what the client brief is. We have to articulate what the client’s needs are and help the client define those. They’re only going to get what they put into their requirements and nothing more. So I think what’s very important is to be very clear on what the client brief is.” n

“While this presents a huge opportunity for us, our core mission as an organization has always been to deliver the highest quality of service that ultimately contributes to the economic, social and environmental sustainability of the region.” Since 2011, AESG has worked closely with government organisations in Dubai, Abu Dhabi and Qatar as well as on large scale projects for private developers and multinational enterprises.

Clear vision Developers need to have a clear understanding of what they want to achieve.

MIDDLE EAST

SPECIAL REPORT RECRUITMENT

MAY 2013

bigprojectME.com

SPECIAL REPORT RECRUITMENT

Dial M

for ManpoweR Big Project ME examines the recruitment process for the construction industry, right from hiring the right engineers for a project, to recruiting thousands of labourers from South-East Asian countries. Jonathon Savill reports exactly right. It is a difficult combination if you are looking for local talent but for construction companies it could be a huge problem. Part of the matrix is the division of labour – literally. On the one hand you are looking for a few specific skills within one of the engineering disciplines and on the other you are looking for massive numbers of labourers. There is not just a need for feet on the ground, you must provide the infrastructure to support them. There is a cost element too. At the moment much of the rest of the world is still in depression, especially in Europe. But if there is a glut of new projects then the supply of labour could be affected. There will probably never be a shortage of unskilled labour as such, but if demand rises then lazy recruiters will simply pay more and thus affect the market cost of this commodity. The problem starts right from finding the manpower. We in the Middle East are lucky because we have the developing

foreign components of gcc labour force in 2008 n Saudi 4,282,000 n Kuwait 1,742,000 n Bahrain 458,000 n Oman 809,000 n Qatar 1,193,000 n UAE 2,588,000 Source: LSE

“Construction is a triumvirate of materials, equipment and manpower. Manpower is a funny thing. You always have too little or too much and it is never exactly right.”

MAY 2013

MIDDLE EAST

2013 Deloitte report on construction points out that: ‘The challenges that Middle East businesses have had to understand, analyse, manage and overcome in the past few years is, quite simply, unprecedented.’ Certainly the optimism engendered by another new business dawn has got worn. But at last the recovery seems to be happening and new projects are entering the field, even certain zombie projects are awakening and slumbering back to life. According to Khaled Alkharrat of bayt. com, business has never been healthier. They have around eleven million job seekers on their database and roughly four thousand companies who trawl their database to offer jobs. But the crucial statistic he mentions is that 12,800 new job seekers are joining the site every single day. And of course new construction will engender new supply issues. What was overstocked and available a year ago can easily become an acute shortage without warning. This magazine has recently carried reports of trucks in Saudi queuing for five days for cement. Certainly no infrastructure of supply could address the boom and bust of recent times with any sense of equanimity. Construction is a triumvirate of materials, equipment and manpower. Manpower is a funny thing. You always have too little or too much and it is never

SPECIAL REPORT RECRUITMENT

UAE labour figures n 20% Emirati

population of working age

n 2,768,030 Number of males in UAE from 2005 census

n 1,008,404 Number of females in UAE from 2005 census

MIDDLE EAST

LABOUR INTENSIVE The cost of recruitment of labourers is rising in the GCC.

MAY 2013

world right on our doorstep. Traditionally Dubai has been built by workers from India, Pakistan, Bangladesh and the Philippines. But now recruiters are casting the net further afield in an attempt to fulfil their quotas. Once you have found your staff you have to transport them to site. This can be a problem and contractors have sometimes been forced to charter planes to get labourers into the country. There is also the outside regulatory influence on labour. GCC countries will soon pass a law regulating foreign labour in the Gulf countries, including returning marginal and unskilled foreign workers to their home countries, a Gulf official claims. “There are responsible parties at the council looking for a mechanism to verify whether or not the expat worker does have the skill for which he was brought to the Gulf,” the official tells local media. “The council will also attempt to eliminate workers who claim skills they do not possess.” Fawzi Al Majdali, secretary general of the programme for restructuring labour in Kuwait, says new regulations will minimise unused labourers with no clear contracts with their employers.

bigprojectME.com

“There are responsible parties at the council looking for a mechanism to verify whether or not the expat worker does have the skill for which he was brought to the Gulf”

“Kuwait has recently said that it will cut down and send away 100,000 expat workers who are considered marginal, in order to replace them with local labour,” he asserts. This is a problem. A recent academic report points out: “Less encouraging are the kinds of jobs created. In general, Middle Eastern countries have not made the dynamic shifts that occurred, for instance, in Ireland in the 1990s, where the sectors with the highest productivity gains also produced relatively more jobs, leading to rapid growth, declining long-term unemployment, and rising standards of living. “By contrast, job growth from construction and public works is mainly cyclical and does not provide sustainable and high-quality jobs over the longer term. People working in such jobs are not likely to be more successful in joining the conventional labour market than before, risking a return to the pool of unemployed after the job ends.” The Middle East is a strange economy. More than half the population is expatriate, but there are unemployed locals. There is a strong movement to employ more locals but there is still a throwaway culture for low level manual jobs. The dependence on expatriate labour has skewed the countries demographics; Emirati nationals account for about 20% of the population. This has created an imbalanced population composition in favour of males; in 1997, there were 1,755,000 males and 869,000 females in Dubai. This immigrant cycle has happened in Britain several times; Jamaicans were brought in and then replaced by Indians, for example. Britain has a long history of importing immigrant labour but then commits to them. The Middle East doesn’t. It is a straight barter, the

SPECIAL REPORT RECRUITMENT

“Right now it’s a seller’s market. Construction is buoyant right round the world and professionals are apt to travel.” Freeman doesn’t think the Middle Eastern culture is conducive to employees feeling secure: “There is a shorter job cycle in here, it’s been that way for quite a while. If and when an engineer joins a project there is a fair chance that the management company could get sacked by the client and then the engineer could find himself made redundant.” “There is a shortage of good commercial professionals at the moment. We need more quantity surveyors. We are looking for twenty four of them right now.” Freeman explains the way he finds people: “We don’t just advertise. We look at companies that may be struggling and approach their staff.” It seems then that Dubai may find itself competing at both ends of the labour supply spectrum. According to Freeman: “Right now Hong Kong is very vibrant for construction. And in the very near future Doha is starting work on the trains and of course the football projects are kicking in.” Even the Eurozone, embattled as it is will still be continuously building new projects for infrastructure, he points out. But Dubai’s ambitious announcements will not be curtailed by reality, it’s just that future big visions may be tempered by a higher labour bill and even a possible shortage of skills at the very top end of the construction business. n

The increased construction activity in the UAE has led to a jump in jobs in the construction industry, a survey released by naukrigulf.com has found. According to the results of the survey, more approximately 58% of recruiters in the GCC predict that new jobs will increase in the coming quarter. These recruiters are optimistic about the overall recruitment scenario, and say that the majority of demand will be for the eight to fifteen year experience level. Trevor Murphy, managing director at Morgan McKinley believes that the construction sector will show marked improvement in 2013 and predicted that construction would pick up in Abu Dhabi and Dubai.

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immigrant comes, works and then leaves. In the case of skilled people it is an understood deal. The skilled worker comes here, earns above the going rate, saves and retires. In the case of unskilled labour it is less of a choice for hundreds of thousands of poor uneducated immigrant workers. While there are thousands of workers who are fed, accommodated and are able to return home better off than if they had stayed there, the Human Rights Watch 2013 report claims that migrant workers often face hardship during their stay. “Research in countries such as Bahrain and the UAE has documented many migrant workers suffer serious abuses after being placed in overseas employment by these agencies and many are deliberately misled about the conditions they can expect in their new jobs,” says the report. Then there is the further problem of conflict between different nationalities and communities. One construction site boss recently told Big Project ME that he had problems with fighting between his Nepalese workers and his Bangladeshi workers. He partially cure it by making sure that where there was a Bangladeshi in charge then his number two was always Nepalese, and vice versa. Jim Freeman is the boss of Freeman Consultants. He thinks that the Dubai market is recovering but it will take five years to get back to where it was during the boom. He thinks it will take that long for projects like Falcon City to be completed and thus open up the market. There is a set of statistics to determine need for a project. Software, regional experience and a tiny bit of guesswork all allow the contractor to estimate the resources and thus the time that a specific project might take. One advantage for consultants needing labour is that they may be able to borrow labourers from other large contractors. They will reduce their labour force but because labour is cheap they will keep an excess. Freeman thinks that it would be possible to borrow three hundred or so for up to a year. He also points out that accommodation for the sub-continent workforce has improved beyond measure: “It’s not just tin shacks any more. Now its custom built concrete buildings.”

EVENT ANALYSIS

CONSTRUCTION MACHINERY SHOW

The Construction Machinery Show 2013 came to Jeddah last month and showcased a sector that is helping to build an exciting future for the Kingdom of Saudi Arabia

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eading local and regional players in the heavy machinery industry in KSA and across the GCC landed in the coastal city of Jeddah as the largest construction and equipment exhibition in the region, as the Construction Machinery Show opened its doors last month. The event was inaugurated by His Excellency Hani Abu Ras, mayor of Jeddah in the presence of the show’s Asian and European delegates. Following a brief ribbon cutting ceremony, Dr Abu Ras – who recently picked up an award for development of the year at the Big Project Awards – declared the show open. This year’s Construction Machinery Show featured major industry players in the KSA construction equipment industry including Saudi Diesel Equipment, Roots Group Arabia, Kanoo Machinery, Abahsain Co, Al Qahtani and many more. “This year’s show saw the display of over 70 brands showing the latest heavy construction and machinery equipment,” said Raz Islam, Publishing Director and organiser of the event. “It comes to support a booming construction market in the Kingdom which is eager to learn more ways to apply new technologies and efficient construction methods that would further enhance the market and increase its construction capabilities.” Raz further pointed out: “This is the largest exhibition of its kind and the exhibitors should be proud and therefore invest in stand designs and branding. If you represent a major brand, you should follow the guideline set by the manufacturer. It is

MAY 2013

bigprojectME.com

MAY 2013

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EVENT ANALYSIS

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EVENT ANALYSIS

on the show floor Visitors to the event were treated to an extensive array and choice of light and heavy equipment.

n $806 billion –

amount Saudi will spend on projects up to 2030.

n $252.22 billion –

values of real estate projects in the Kingdom.

n $332.82 billion –

To be spent on energy projects, including reducing Saudi’s reliance on oil and gas.

n $220.95 billion –

budget for infrastructure, water and power (IWP) projects.

n 30% –

Expected rise in machinery demand in 2013.

n 2,500 –

Number of visitors at the show.

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great to see the event looking professional and getting better every year. The gathering of all these players is an ideal opportunity for all to benefit from their presence and their experience.” The Construction Machinery Show’s success was also an indication of the constant growth of the construction market in the Kingdom of Saudi Arabia which is the largest construction market in the Middle East. The Kingdom is home to an array of multibillion dollar projects with a diverse set of industries from hospitals and medical facilities to universities, cities and industrial and infrastructure projects, all due to complete construction projects within the coming decade.

The show featured companies showcasing a host of construction and machinery products, services and solutions ranging from diggers to crawlers, from cranes to trucks, and lighting firms to generator businesses. The massive range on show demonstrated why the Saudi market for heavy equipment is the dominant force in the Middle East. Neighbouring markets such as the UAE, which has plateaued since collapsing following the global financial crisis, Qatar which is still awaiting its own FIFA World Cup 2022 and Vision 2030 boom and Iraq and Egypt, which have their own unique challenges, are all considered potentially exciting areas. However, if you want to see the biggest range and volume, the Kingdom is the place to be. Subsequently the show was a mixture of established dealers in the market such as Saudi Diesel and Kanoo, as well as some of the biggest names in the industry tussling for a share of contractor and operator attention like Sany, JCB, TATA, Case (via Roots Group) and LiuGong, and many others. The Saudi Diesel stand was arguably the most impressive among a packed show, showcasing and reflected managing director Raad Abduljawad’s philosophy that the Kingdom needs a forum to bring together as many players in the industry as possible. “We need a construction machinery show in the country that is successful,” he said. “We need to support it and we will invite our competition to do so.” n

ON SITE FUJAIRAH

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Project Name

Fujairah Port Truck Road

Location

Fujairah

Site Area

5km

Building type

Road construction/excavation

Make the

high road Big Project ME joins specialist contractor Al-Fala as it carves a logistics artery through the mountains of Fujairah

Fujairah truck road facts n 130,000 - number

of articulated truck journeys it will take to clear the route.

n 40 - Current number of heavy machines deployed on the operation.

n 10,000m3 - area of

rock that will need to be clear before the road can be laid.

n 1.2 million - tonnes

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of fill created by the excavation and blasting en-route.

MAY 2013

art-quarrying operation, part-road building, contractor Al-Falah is currently taking on the formidable task of constructing a truck route through the mountains that lie to the west of the UAE city of Fujairah. The road is being built to ease congestion into Fujairah’s port. The city itself provides an open water access point to the Indian Ocean for the oil and gas industry and is thriving as the UAE looks to form a gateway from its Gulf-locked metropolises of Abu Dhabi and Dubai to global trade. (In the event of another Gulf war or an Iranian blocking of the Strait of Hormuz, Fujairah could also be its lifeline to the rest of the world.) While the Gulf coast cities have the advantage of space to build their infrastructure and roads and can afford expansive six-lane highways, the more frugal Fujairah is penned in by mountains on almost all sides. Both existing routes

westward travel through passes that can cope with truck traffic but there simply isn’t the room to push more traffic through the suburbs. As freight traffic continues to grow, the port’s location at the remote end of the city presents city planners with a challenge. How can they allow it to grow without leaving its residents living in smoggy gridlock? The new high road out of town is – hopefully – the answer. Al-Falah’s work on the project can be described as cut and fill on the grandest of scales. The route selected takes in the lower peaks of a natural pass but with

“We have a programme for drilling and blasting. We need to keep the production moving. We need to finish.”

ON SITE FUJAIRAH

“I kept some machines from 2007 for three years, and then sold them on. After 10,000 hours they were gone. I don’t like to maintain workshops.”

going to be excavated in the absence of a full geographical and geological survey. According to the company, one kilometre into the route it encountered 150m high hard rock faces. The fact that it managed to still complete the project on time is testament to that burgeoning reputation. At the site office near the end of the route on the road to Fujairah, the head of Al-Falah says the company has made the leap from the Lebanon to the Gulf by building on years of experience. “It is the same environment, like these mountains. Although is not the same rock as here you have gravel and limestone, but it is the same kind of job,” he explains. Farhat adds that his current fleet of 40 machines will need to be expanded to more than 50 as the operation steps up its pace. The fleet he currently owns is rigorously cared for to ensure they keep their considerable value. “I kept some machines from 2007 for three years, and then sold them on. After 10,000 hours they were gone,” says Farhat. “I don’t like to maintain workshops. I like Caterpillar’s 740Bs... I need ten more!” n

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the entrances to the valley close to sea level it is using a fleet of excavators armed with breakers and buckets to scrape and remove material from the mountain’s sides. Large articulated dump trucks take the material and clear the way; Al-Falah is taking down a mountain bit by bit. Early morning blasts are being used to not only create the route but to also provide much of the material that will be used in the construction of the road. This process is overseen by the local authority; and one of the Al-Falah team in on-site suggests that Fujairah has been highly supportive to the operation within the emirate. In March Al-Falah completed 14 blasts and the programme is set to accelerate. “We have a programme for drilling and blasting. We need to keep the production moving. We need to finish,” says chairman Abdullah Farhat. At a rate of almost a blast every two days it is a rate that would be unusual even at the busiest of quarries. Having seen the size of the task at hand – and the extent of how much rock is still needed to be excavator – it is understandable why the contractor is keeping such a tight schedule even if the completion date is not due for another 12 months. In total 10,000m3 will need to be shifted. Out of the 3 million tonnes of rock the contractor has to move, 1.2 million is being used as fill. The remaining 800,000 will have to be used to protect the edge from landslides. The articulated trucks being used to move the material will need to complete 130,000 journeys before the route is complete. Al-Falah was begun as company in the Lebanon in the mid-1990s but quickly began looking further afield for business. It is just ten years since the contractor began operating as a road contractor in the UAE, but recognition from the local municipality bolsters its reputation as the mountain road builder in Fujairah. A recently completed project in Masafi typifies why it is now being trusted with major projects in the northern emirates. Building a service road in a remote location, Al-Falah entered into the contract not knowing the type of material was

FINANCE korean lesson

s n o s s e L om the east fr

MAY 2013

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ing is ines how project fund Big Project ME exam the GCC s on rea and what less obtained in South Ko thon Savill reports can learn from it. Jona

FINANCE Korean lesson

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here is a buzz in the air. Literally. The sound of construction sits on the air and every empty piece of land is being drilled or filled by some hopeful. Yet traditional funding is morphing and changing. For smaller projects, like real estate, there is often less of a requirement for the contractor to put funding in place as the client will provide start up payments and periodic disbursements to ensure the contractor has the funding necessary for initial materials costs etc. So the issue of funding will be less influential on contracting strategy. It was agreed upon by the members of the Basel Committee on Banking Supervision in 2010–11, and was scheduled to be introduced from 2013 until 2015; changes from January 7, 2013 extended implementation until 2019. These regulations are the equivalent of speed cameras on the highway of finance. Essentially it means the banks have to actually own the money they give away. In banking terms it’s like paying cash instead of using your credit card. European banks have stated an unwillingness to support much more construction investment. Saudi Arabia has slightly pulled back from the peak levels of its lending although they will still carry some indebtedness. While sound developers will always get funding, because they just do. At a higher level though it’s about a country’s banks standing behind industry. An English company has a relatively small chance of securing funds from its mother country. In contrast, UAE companies have Sukuk and Islamic financing, which although relatively small, are currently growing and developing in an encouraging way. So in a straight race for finance who will be clear winners? Step forward the South Koreans. Matthew Martin from MEED explains: “In terms of funding a large infrastructure project in the GCC, Korean companies typically have an advantage in being able to gain access to Kexim funding, which in the past has been cheap and relatively plentiful. In contrast European, local or Chinese contractors would not have that advantage as European ECAs have been less aggressive in supporting their

MAY 2013

home grown firms win work abroad, and Chinese funding into the Middle East is still nascent.” This is one of the factors that explains why South Korean firms are the most successful in terms of contract awards in the oil and gas sector the region. Japanese firms have a similar advantage in terms of getting funding from JBIC, which is why the Japanese often crop up as well. For that reason, some project sponsors will deliberately use Korean or Japanese equipment or contractors, because they can then access ECA financing from the relevant country. And here is the refreshing bit. Kexim borrows the money it lends. Last year it raised $11 billion from debt markets, making it one of Asia’s most prolific borrowers. And it doesn’t go out partying

Global investment South Korean banks are investing the GCC, China and Asia.

KEXIM finance n $11 billion Amount raised from debt markets in 2012

n $2.6 billion Amount borrowed in 2006

n 25 Number of

different currencies tapped in 2012

“In terms of funding a large infrastructure project in the GCC, Korean companies typically have an advantage in being able to gain access to Kexim funding, which in the past has been cheap and relatively plentiful.”

FINANCE korean lesson

“Korea Eximbank became the first noninternational financial institution in the world to successfully issue a global Green Bond. Previously, only the World Bank and several other international organisations had issued Green Bonds”

South Korean construction companies have emerged as major players in the Middle Eastern construction market. A wide range of projects, ranging from nuclear power plants to oil-refining facilities, have been won by construction firms from the East Asian country, pushing cumulative overseas orders over the past four decades to $500 billion. “Besides the Middle East, we have established a foothold in China and South Africa, which has helped us win a contract to build a power plant in the Ivory Coast early this year,” Hyundai Engineering & Construction has said. “We will further expand our reach to explore rapidly developing markets.”

Qatar investment South Korean banks have been funding Qatari projects.

which can only be used to finance ‘green’ initiatives such as new and renewable energy projects. It is a special purpose bond to support low-carbon, green industry projects and requires ‘green certification’ from internationally acknowledged authorities. “The current environment is very good for us borrowers,” chief financial officer Kim Yoon-Yung says. “As the Korean economy grows, the funding requirement from our clients has gotten bigger and bigger,” he says. Kexim has provided loans to an Indonesian steel plant part- owned by Posco and a Qatar gas project being built by Hyundai Heavy Industries Co in the past 12 months to bolster South Korean exporters, whose output is equivalent to half the nation’s economy, Korean borrowers led by Kexim have sold $15.5 billion of international debt in 2012. In a situation where the western world has adopted Basle 3, US banks have said that they don’t want to invest in long term infrastructures, French banks have decided to stop lending and even Saudi banks are less keen to invest we have banks going out of their way to do what banks are supposed to do. True, they are borrowing money, but they are spending it on exports. These exports currently account for 50% of the country’s GDP. The fact is that projects need financing and with this kind of differential having finance in place could become a self-fulfilling prophecy. In other words a client might favour a Korean company simply because it has funds in place. This in turn makes the contractor wealthier and thus more credit worthy. Certainly while North Korea is waging a war of rhetoric with the USA, the South Koreans could be taking over the world in a quieter and far more efficient way. n

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with the money either. Its specific purpose is to lend to Korean exporters as they push into new markets. They are borrowing more as well. In 2006 they borrowed $2.6 billion and have been increasing every year and will go on doing so. Their CEO Choi Sung-hwan is also the chief financial officer of the bank and he is very astute at borrowing money. Last year Kexim tapped 25 different currencies including for the first time ever, the sterling market, “Our total size of funding has been growing, and to get that size and achieve competitive pricing we have no choice but to diversify our funding sources,” the bank’s CEO says. Timing is also important. Choi and his team take calls from debt bankers every day and listen to their advice. Given the current volatility of the markets and the sums being traded, the right moment can make an enormous difference in the sums that Kexim’s borrowers have to pay. Nor does the ingenuity of this bank only extend to borrowing loads of cash to lend out. In February, the Export-Import Bank of Korea announced that it had successfully issued a global Green Bond worth $500 million to its investors around the world. It thus became the first noninternational financial institution in the world to successfully issue a global Green Bond. Previously, only the World Bank and several other international organisations had issued Green Bonds. A Green Bond is a debt instrument

CPD modules

bigprojectME.com

Ceiling Cassettes Physical comfort in the workplace has been shown to increase workers’ productivity and can be achieved with the aid of welldesigned air conditioning systems – such as ceiling cassette fan coil units – which also improve energy efficiency.

here is a continual striving for better comfort conditions in the workplace and, at the same time, a need to reduce the energy consumption required to achieve that level of comfort. This article considers the complex issues surrounding comfort and some developments that have taken place to improve comfort and efficiency when using ceiling cassettes for air conditioning.

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“The generally accepted range of air velocity in an occupied area is between 0.1 and 0.3 m/s, although higher velocities can be used in naturally ventilated spaces in the summer, to provide a cooling effect”

MAY 2013

Introduction to comfort A broad definition of comfort is “that condition of mind that expresses satisfaction with the thermal environment” [1]. There will always be dissatisfaction expressed by some and the design process must include features that will reduce this to a minimum. There are many factors that influence comfort:

n Thermal conditions n Visual elements n Acoustic elements n Electromagnetic and static electricity n Air quality Here we shall confine ourselves to thermal comfort, which will include:

CPD modules

FIGURES 1-3

“Humidity has little effect on the warmth feeling and for most applications humidity in the range of 40-70% is acceptable”

In addition to these environmental factors, there are also personal conditions that affect our feeling of comfort: n Clothing n Activity level. Again, we shall restrict the article to temperature, humidity and air movement, but further reading suggestions are given should you wish to explore this topic further. For temperature, it is usual to refer to the operative temperature, which combines the room air and radiant temperatures. Table 1 is a subjective scale of feeling hot or cold. A change of 3K will alter the thermal sensation by about one unit. For example, raising the temperature by 3K for a person working at a desk and feeling “slightly warm”, will make them feel “warm”. Information on suitable temperatures for various applications can be found in the CIBSE Guide A 2006. Air movement in a space has a cooling effect on the occupants. If the air speed is too high, complaints may be made about draughts. If the air speed is too low, complaints about air quality arise. The generally accepted range of air velocity in an occupied area is between 0.1 and 0.3 m/s, although higher velocities can be used in naturally ventilated spaces in the summer, to provide a cooling effect. Studies also show that varying the direction of air flow makes occupants more tolerant of air movement. For ceiling air discharge, such as cassettes or ducted diffusers, it is important that at the occupied height in the room, the supply air temperature and speed has mixed with the room air to produce the comfort level required. Figure 1 shows the percentage of people dissatisfied as a function of mean air velocity.

Humidity has little effect on the warmth feeling and for most applications humidity in the range of 40-70% is acceptable. However, humidity levels are important in the areas of mould growth, storage of artefacts and static electricity. Figure 2 shows acceptable ranges of operative temperature and humidity for people in typical summer and winter clothing, as recommended by ASHRAE [2]. Measurement of thermal comfort is complex, but the PMV/PPD method does provide an assessment of comfort. It is a mathematical model, based on work done by Fanger [3], of human thermal physiology calibrated against the warmth factor shown in Table 1. PMV is the “predicted mean vote” and combines the effects of air and radiant temperatures, air movement and humidity with clothing and activity level, to produce the thermal sensation scale of Table 1. It is the mean value of the votes of a large group of people doing the same thing, in the same environment, dressed the same. PPD is the “predicted percentage dissatisfied” and identifies the percentage of people who would be dissatisfied with their thermal comfort at particular conditions. Figure 3 shows the relationship between PMV and PPD, where an example of a PMV of –0.5 (+1 is slightly warm and -1 is slightly cool) relates to a PPD of 10%, i.e., around 10% of Developments in ceiling cassettes have arrived at an innovative solution – at present unique – of a Class A energy-rated ceiling cassette that provides 360° radial air discharge with the attendant benefits of uniform airflow, reduced temperature differentials, less draughts and improved energy efficiency. The cassette is designed for use in all forms of commercial office, retail, restaurant and hotel applications.

Thermal Comfort The graphs and tables use the PMV/PPD method to provide an assessment of comfort.

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n Temperature n Humidity n Air movement n Air quality

CPD modules

The cassettes can be used with VRV/ VRF systems in a cooling capacity range from 2-14 kW. An important factor with ceiling cassettes is their depth, ideally as small as possible to reduce the required false ceiling height. A development here offers a “thin” body cassette of 214 mm depth. Operating sound is at the remarkably low level of 27 dBA or comparable to the sound of rustling leaves. Improved comfort conditions in the room are achieved by the 360°, all-round air distribution, made possible at the casing corners by repositioning the float switch and drain pan. Most current fourway blow ceiling cassettes have inherent dead zones in their airflow patterns. Figure 4 illustrates the improvement in the comfort index throughout the conditioned space. The cassette’s uniform airflow discharge produces a more uniform temperature distribution and the colour distribution indicates the variation in PMV index. The neutral zone is –0.5, and results show that the PMV index has improved from 78% to 87%. During the cooling cycle, the airflow pattern of a standard four-way blow cassette tends to give rise to a lower temperature in less occupied areas of a room and higher temperatures near windows. The reverse situation occurs during the heating cycle. The new cassette’s uniform temperature distribution overcomes this problem and in doing so reduces the airflow velocity from the 1.65 m/s of a standard four-way blow cassette to 1.24 m/s with a consequent 25% reduction in cold draughts during the cooling cycle, plus an energy reduction from the fan. Energy efficiency also stems from uniform airflow and temperature

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Comfort zones Figure 4 illustrates how the comfort index can be improved.

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“During the cooling cycle, the airflow pattern of a standard four-way blow cassette tends to give rise to a lower temperature in less occupied areas of a room and higher temperatures near windows. The reverse situation occurs during the heating cycle”

MAY 2013

since the unit’s reduced temperature differentials minimise unit operating cycles and enable a higher cooling temperature setting with an attendant 15% saving in energy consumption. As an option to the thin-bodied cassette, it is possible to use the high COP cassette, which incorporates a larger surface area heat exchanger, increases COP and reduces energy consumption. The development of this cassette includes the flexible use of 23 different airflow patterns. As well as the 360° allround air flow, the use of closure kits to shut off relevant louvres enables four-way, three-way and two-way flow patterns to be achieved. This flexibility enables the unit to be installed in corners or small rooms. During four-way flow, the air volume is slightly decreased when the corners are closed off and in three-way and two-way flow, the air flow is deflected slightly downwards accordingly. Further developments in the control of the cooling and heating include the incorporation of a humidity sensor. The cassette control is from the centralised control network which enables direct connection to its I-Controller, I-Manager, Lon Gateway and BACnet Gateway systems. The remote controller offers easy fingertip control and is fitted with a schedule timer allowing the air conditioning to be programmed on a daily or weekly basis.

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CPD modules

An optional remote on/off controller enables the system to be started or stopped from a mobile phone via a field supplied telephone remote control. The optional “forced off” condition enables the unit to be switched off automatically when, for example, a window is opened. The VRV outdoor unit is based around integrated inverter control and therefore matches output to cooling or heating demand instead of supplying maximum load purely on the on/off basis of noninverter systems. Furthermore, the inverter contributes to added comfort by reducing the lead time necessary to reach the required indoor temperature. Once the temperature is reached, the inverter then continuously scans the air conditioned area for small drops

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or increases in room temperature and then adjusts the temperature in seconds in order, so as to help maintain the occupant’s comfort levels. Practical developments that assist in easier installation and maintenance procedures have also been made. The cassette’s weight ranges are upward from 19 kilograms. Lightweight hollow-bladed turbo fans also contribute to the weight reduction of the cassette. Easier drain-pan maintenance can be achieved without removal of the decorative panel and condensate draining can also be viewed via the clearly visible drain socket. An integral “home leave” facility can be activated when the occupant leaves the room for a lengthy period of time, such as a holiday. On activation, the room temperature

is automatically set to a minimum of 10°C, at which point all connected indoor units will switch to heating mode. The function ceases to operate when the room temperature reaches 15°C and should also be switched off when the occupant returns home. n References [1] ASHRAE Standard 55 1992 [2] ASHRAE Handbook – Fundamentals, 8-12, 2005 [3] BS EN ISO 7730, 1995, Moderate Thermal Environments. Determination of the PMV and PPDIndices and Specification of the Conditions for Thermal Comfort Further reading • CIBSE Guide A 2006 • CIBSE Knowledge Series – Comfort 2006 • Daikin Roundflow Cassette literature

Questions for Module 2: Ceiling cassettes Tick one box per question.

a. Comparison of refrigerant pressure and temperature readings

1. Which of the following is not an F-gas:

b.Gas detection device

n Information you supply to CPI may be used

a. R134a

c. Ultra violet detection fluid

for publication and also to provide you with

b. Ammonia

d. Bubble solution

information about our products or services

c. Hydrofluorocarbons

e. Visual inspection

in the form of direct marketing by email,

d. Perfluorocarbons e. Sulphur hexafluoride

telephone, fax or post. Information may also 5) How frequently must a system containing

be made available to third parties.

40 kg of refrigerant charge 2. Which of the following is not a provision

and, without a leak detection system

n “This module will contribute 30

met by the F-gas Regulation EC

installed, be inspected for leaks?

minutes(general) towards your CPD

No 842/2006?

a. Every 3 months

obligations. If successfully completed,

a. Leak detection

b. Twice a year

certificates will be distributed two weeks after

b. Refrigerant recovery

c. Once a year

the module closes.

c. Instruction manuals

d. Monthly

d. Choice of refrigerant

e. Twice a year and after one month from a

n Email carlo@cpidubai.com if you have

e. Record keeping

leak being detected

any questions about our CPD programme.

refrigerant charge for a typical system

NAME (capitals)

Corporate Publishing International

that has a 120 kW compressor motor?

JOB TITLE

P.O. Box 13700, Dubai, UAE

a. 60 kg

COMPANY NAME

Tel: +971 4 440 9100

b.12 kg

ADDRESS

Fax: +971 4 447 2409

c. 1.2 kg

P.O.Box:

Web: cpidubai.com

d. 240 kg

MOBILE:

e.120 kg

FACSIMILE

3) What is the approximate weight of

n You can also contact us on:

EMAIL 4) Which is not a direct method of leak

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detection?

MAY 2013

Big Project ME will be hosting a Buyer & Sponsor only Golf Day in October. The aim is for you to meet the contractors and consultants on a one to one basis and network in a relaxed, fun-filled environment!

GOLF DAYS 24TH OCTOBER, 2013 CONSULTANTS AND ARCHITECTS CUP

CONTACT: PUBLISHING DIRECTOR Raz Islam +971 4 440 9129 raz.islam@cpimediagroup.com

COMMERCIAL DIRECTOR Michael Stansfield +971 4 440 9128 michael.stansfield@cpimediagroup.com

MARKETING MANAGER Carole McCarthy +971 4 440 9157 carole.mccarthy@cpimediagroup.com

TIME & MONEY HONEYWELL

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Helping you make the smartest decisions

watchful eye Big Project ME talks to Mark Flannery, global product manager, about Honeywell’s DVM-R500, a digital video management solution that aims to increase operational efficiency, reduce life cycle costs and improve decision-making functionality

DVM-R500 features A break down of the main features of the system

n Intuition - Enables faster response times

n Freedom - Design based on open global standards

n Integration - Can

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be integrated into broader security platforms

MAY 2013

What is the DVM-R500?

How does it work?

Digital Video Management began life (at Honeywell) in 1999 as one of the first software-only video management systems. The DVM was centred on providing video into an access control solution. It was all about the integration of digital video into the access control world. It went from features and functions through to fault tolerance through to higher availability. The new DVM-R500 console creates the opportunity for organisations to realise increased operational efficiencies by enabling a faster response to security event management and increasing situational awareness in areas with heavy traffic or movement.

From a user’s perspective, they have access all the video feeds, all the recordings and can do all the configurations through a common interface, called Station. That’s the foundation of what the product is. Now with the R-500, the systems we were wanting to go into, they are very video centric. While our previous systems were also video centric, or a lot of them were, it’s all to do with access. So people drive their systems through alarm lists and through custom maps with access control. What we were looking for though, was to add a different dimension to the product, to provide a dedicated video surveillance interface.

TIME & MONEY HONEYWELL

“The new DVM-R500 console enables a faster response to security event management”

What is the need for a system like this?

There is growing need throughout all types of facilities, from airports to shopping centres to hospitals, where maintaining safety and security is critical to operations. There’s a need for an interface that allows an operator to go from instant playback in one minute to moving it along a time line and have the video update automatically. Staff need to be able to search the video for motion in recorded video, so the DVM R500 enables them to do that quickly. What benefits does it offer FM contractors?

Probably the biggest feature and biggest operational time saving features is the motion searching capabilities of the DVM console. That’s the ability to have background recordings and go back in time once an incident has occurred.

Easy install The DVM software is designed to be easily installed.

It’s the forensic capabilities of the system to go back and say, ‘alright when was there movement in this area?’ It takes a long time just going back and looking through days and days of footage and you’re going to miss pieces as well. What DVM-R500 does is integrate data from disparate systems and points through a facility, thus enabling actionable information that promotes productivity improvements, increased detection of abnormal events and faster response times to further mitigate risk in an emergency. Furthermore, the software is very quick to install, it’s based on commercial, off the shelf hardware, and it’s a single executable that goes in very simply. Number two, the system has the capability to be engineered offline, so it doesn’t rely on auto discovery, which means that your cameras need to be installed and discoverable for your system to pick them up. Instead, what we do is take the spreadsheet from your camera list. When you do a major installation, your site will have a master camera schedule. You then take that information and you import it into the system, so your system is fully configured and waiting for your camera to come online..That provides a lot of savings in regards to getting the cameras running. We don’t rely on clustering, or other third party software, to perform the function of fault tolerance. The main reason being that if you do rely on a third party software, the engineers that rely on the commissioning, have to know to configure. You’ve got to make sure that the systems are easy, intuitive and even from an engineering and install perspective, make sure they don’t need a high degree of configuration. We use simple replication and we put a lot of effort into making it all automatic, both from an installation and configuration perspective.n

Dubai airport challenge n 810 CCTV cameras working 24/7

n 400 Doors monitored and controlled across terminal

n 7,500 Status/control points

n 20 Different access levels

n 50,000 Active cardholders

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Video surveillance officers want an interface that helps them do their tasks in a very efficient manner. They don’t want to be playing around with the interface, trying to get it to do what they want. As a customer recently said, they want the interface interact with humans, not make humans interact with the interface. So from that perspective, Honeywell is putting a lot of effort into human factors and ensuring that a lot of the interfaces we deliver are very usercase driven.

SPECIAL FEATURE ENERGY SAVING

bigprojectME.com

plug the leaks Big Project ME examines how the building envelope can help a project reduce its energy emissions, thereby also helping to reduce costs and increase efficiencies

MIDDLE EAST

ccording to the experts, the building envelope is defined as the physical separator between the interior and exterior environments of a building. It fulfils a vital function in terms of facilitating climate control in a building by helping maintain the indoor temperature, in conjunction with the mechanical air conditioning systems installed. Considering how vital it is to maintain the energy wastage of a building, it would be accurate to say that the building envelope is one of the most important factors to consider when ‘going green’. While it has been common knowledge for years in areas like Northern Europe, it has only recently been adopted by the governments and contractors in the Middle East.

MAY 2013

This has meant that there is a significant amount of retrofitting work that needs to be done, with existing buildings not really up to the mark, in terms of the building envelope. In fact, older construction methods in emirates like Sharjah mean that buildings are inherently unsustainable, says Tommy Sharp, the president and CEO of

ThermaCoate, an Atlanta, Georgia based, high performance coatings manufacturer who has launched a series of products that help maintain and preserve the building envelope. “One of the things we’ve really noticed for the Middle Eastern area is going to be uncontrolled solar heat gain in roofs and other substrates. Most

“There’s only two places in the world that are putting this emphasis on the building envelope, on testing the building envelope and on air tightness testing. Those places are northern Europe and the UAE”

SPECIAL FEATURE ENERGY SAVING

“One of the things we’ve really noticed for the Middle Eastern area is going to be uncontrolled solar heat gain in roofs and other substrates”

Air tightness testing n 2011 Less than 50 air tightness tests conducted in UAE

n 2012 Just over 100 tests conducted in UAE

n 2013 More than

200 tests in first quarter of the year

tests increase There has been a rise in the number of air tightness tests in the UAE.

the roofs of buildings, and help keep the temperature down to reasonable levels, while also allowing any trapped water to escape over time. “Even with a lot of new roofing materials coming into the Middle East and the world in general, a lot of times, there isn’t that mechanism built into the materials to help shed the radiant solar heat gain,” he says. “It keeps building and building, and you end up with super-heated substrates, and we all know that when they get hot, especially concrete, they’re going to expand, and when they cool off, they’re going to contract and that natural expansion and contraction, the exposure to solar heat gain really shortens the life of concrete substrates, it cracks them up and busts them.” One of the foremost experts in building envelope testing in the UAE, William Whistler has long been an advocate of testing for air tightness in buildings. Having conducted numerous tests on buildings in Abu Dhabi, he’s seen a gradual shift in the way it’s being regarded in the region. “I estimate that in 2011 that there was probably less than 50 air tightness tests, including every hotel room that was tested in. 2012, probably just over a 100. Right now, my company, and there are some other people coming along in the market, here in April, in the first quarter, I’ve already booked over 200 tests. So it is growing very much and the awareness by contractors and builders is very much out there,” he tells Big Project ME. Furthermore, both Abu Dhabi and Dubai have adopted or are about to adopt mandatory codes that will make air-tightness testing compulsory for new buildings over a certain size. He says that these codes will come into effect in Abu Dhabi by February 2014, while Dubai has made air-tightness testing

MAY 2013

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of the construction in the Middle East seems to have been from concrete, especially in housing and low to mid-rise buildings,” he tells Big Project ME during a telephone conversation. “In places like Sharjah there’s a preponderance of high-rise concrete construction and that’s in stark contrast to the way they build them now with glass and steel facades. You’ve got a whole lot of exposed concrete in Sharjah, it’s a very tall city and looking at those, aside from the windows on them, a lot of them probably are going to have single pane windows, that’s a problem as far as a retro fit goes (for the building envelope).” Cecilia Andrade, an energy management engineer currently conducting a study on energy savings in Dubai hotels, says that the most common cause for air leakages is an inadequate barrier in the building envelope that does not help keep the air in. “Air infiltration or exfiltration commonly happen through the following points: top and bottom of the building, roofs, windows, walls, chase ways, elevators, stairways, junctions of different materials etc. causing energy losses and therefore mechanical systems inefficiency,” she explains. With this in mind, Sharp says that his company has developed a product that not only helps insulate the building, but also allow the release of trapped moisture from concrete. “You’ve got this huge urban heat island heat effect around, just from things that get hot during the day, and then will emanate heat during the night,” he says. “Something else that goes on in the envelope of these structures, in the Middle East in particular, is moisture entrapment. Once moisture gets in, and you watch them build a building now, and as soon as they’ve got them up, they’re apply coatings to keep water from getting inside and becoming entrapped.” “The unfortunate thing is that when they build the buildings, they’ve got such a high humid climate, in the GCC in particular, that the water is already in the concrete by the time you’ve finished building it,” Sharp adds. As such, he plans to release a coating in the market that will not only help insulate

SPECIAL FEATURE ENERGY SAVING

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mandatory for government buildings since 2010. Whistler adds that this will be extended to all buildings in Dubai, of a certain size, within a short time. “There’s only two places in the world that are putting this emphasis on the building envelope, on testing the building envelope and on air tightness testing. Those places are northern Europe and the UAE,” he asserts. Welcome as this news is, Tommy Sharp says that more can be done to help push the building envelope, so to speak. This starts right from the beginning of construction, he says. With prestressed concrete being one of the most common methods of construction, Sharp says that modifications can be made to the process to allow for the use of coatings that help with maintaining the building envelope. “What we’d like to see in the Middle East is a redesign of the way prestressed concrete panels, for example, are done. Right now, in the Middle East when they do one, it incorporates an extruded

MAY 2013

bigprojectME.com

Mandatory testing Dubai and Abu Dhabi are cracking down on air tightness testing.

piece of polystyrene foam sandwiched between an outer layer and an inner layer of concrete, this is the sandwich around this foam and that’s pretty much how they build a prestressed concrete panel in the Middle East,” he says. “We would almost like them to go to a thicker pour, almost speed up their process a little bit as well, but a quicker or a thicker pour and just use materials like ThermaCoate as a primer,” he adds, pointing out that this would cut down on the moisture entrapment that gets in during the construction process. So it’s clear then that the industry is moving forwards in the right direction, but there remains more to be done. What’s been most promising however is that there has been an acknowledgement of the issues at hand, and the local industry has begun to pick on the problems that have been contributing to the UAE’s long established reputation of being energy inefficient. The onus is now on the industry to carry forward the work being down by these pioneers in the region, and allow greater gains to be made, a process that Whistler says is definitely underway. “Both Abu Dhabi and Dubai are taking green building very seriously, and the government has realised, maybe the public hasn’t realised it, but there’s simply not the ability to build enough power plants in the traditional way, to handle the electric load for the projected population here.” “They have to start to conserve that energy and use renewables and do things like design buildings more passively, increase the code so that insulation levels are higher. What’s great about both the Abu Dhabi code and the Masdar green building regulations, for the first time anywhere, they’re recognising passive building thinking in what they’re doing.” n

“Even with a lot of new roofing materials coming into the Middle East and the world in general, a lot of times, there isn’t that mechanism built into the materials to help shed the radiant solar heat gain”

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SPECIAL FEATURE Facilities management

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Unsung heroes Can facilities management help to ensure that the operation of buildings stays as efficient as possible?

MIDDLE EAST

he perfect building would be designed adhering to green principles and make good use of the building waste it generates. It would be energy efficient throughout its life, easy to maintain and increasingly the building would become smart and contribute to the comfort of its inhabitants or users. The perfect building would not chuck out CO2 in bucket loads and hopefully would not be as ugly as a bag of spanners. And in future that will happen. In the meantime those people involved in facility management attempt to maintain buildings designed by Apple users. They are the ones that rapidly find out why

MAY 2013

particular features were actually a very bad idea indeed. FM companies are the unsung heroes of our society. They are increasingly involved in exceedingly complex systems, and yet their outfacing image is a scruffy bloke with a mop. Like all of us, FM saves energy in buildings. Unlike many of us they are saving energy in buildings they don’t own, so they need help from their clients. Big Project ME spoke to Sandrine Le Biavant, division manager – Consulting, Farnek. We asked her which processes energy companies implement when it comes to energy savings: “It all starts with

the interest of the property manager or owners. This is why we have spent last year raising the awareness of the community towards sustainability and CO2 reduction. The first thing to understand is that each property behaves differently than others due to utilisation, while having some similarities in savings opportunities. It is based on the equipment used and practices put in place by the operations teams.” “Our objective is to build a strong picture of the property’s facility, equipment and existing energy saving measures. To reach there, we need to ensure that the proper metering is in

SPECIAL FEATURE Facilities management

Energy audit FM firms are using BMS to dig into the source of issues once analysed.

facilities have a comfortable environment to carry out the task the building exists for. User comfort within buildings is seen as very important.” “Benefits include lower facilities maintenance cost, lower heating and cooling costs increased occupants comfort, reduced condensation and moisture, improved indoor air quality, reduced emissions output and energy saving due to the reduced cooling and lighting costs.” “Effective technologies are used such as Occupancy Responsive Lighting Solutions and Integrated Day lighting Systems in reducing lighting energy.” La Biavant agrees: “We hear that LED lights will be made mandatory by 2014, that new buildings are required to have solar heaters, that a new code of building is coming for new properties. Dubai Municipality buildings are starting to reduce the CO2 emissions.” “Oddly much of the resistance to energy savings comes from on the ground We notice that one major obstacle to

FM Revolution n LED Lights

The energy saving lights are set to be mandatory in Dubai by 2014

n CO2 reduction

Dubai Municipality buildings have begun to cut their emisssions

n Technology adoption Clients are startting to adopt software to make their buildings efficient

“The first thing to understand is that each property behaves differently than others due to utilisation”

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place, which is not always the case,” she explains during a phone interview. In many ways FM savings are a sort of wood/trees exercise. You have to find out what the problem is before you can fix it: “The moment of truth is in the base line analysis, integrating two years of information. We are able to see the trends of energy and water consumption, identify how efficient the property is, and make the right decisions to manage energy optimisation,” she says. Farnek has developed software for different types of facilities, their ‘Office Optimiser’ and ‘Residence Optimise’ enables them to take action if they see the property has opportunities of savings in comparison to other properties they manage, but also it forces the teams onsite to have a sharper eye by being conscious that someone is watching. This is different from the Building Management System graphs and services as it shows overall building patterns. Farnek uses BMS to dig into the source of the issues once analysed. Le Biavant explains: “We strongly believe in physical audits (not remote) where we measure the efficiency of each piece of equipment that consumes energy or water with some sophisticated tools that review the load demand. Our energy auditors spend time with the FM team and facility visits to identify leaks and unnoticed wrong practices. We then recommend the best energy saving solutions for our client’s benefit with different levels of investment, from no cost to CAPEX.” Manzoor Chaudhary is manager of Service Assurance for EFS Facilities Services: “Energy reduction strategies within buildings are numerous and can consist of some of the following; energyefficient appliances, good insulation, a smart natural ventilation and lighting strategy. In summary, these all act to reduce the undesirable heat flow in and out of a building, which is where the increased use of glass facades can cause a problem.” “An important role of most buildings is to act as protective barrier against the outside environment, and daily climatic fluctuations. It is a fundamental requirement that users inside the

SPECIAL FEATURE Facilities management

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energy saving is that some people have rents which include water, electricity and cooling and they feel that if they invest, they cannot control the savings and do not see any benefits. Adding meters is not cheap and if owners do not want to do it for them, the process stops.” She carries on: “The other challenge is that the market in UAE (clients are ready; but the support industry like banks are not) is not ready for more advanced support from the energy management company.” “Clients should pre-invest and then they would be remunerated through a share of the savings generated. This formula needs a strong framework and an adaptation to the local market and this is not yet in place.” “Once people have moved from awareness to wish for taking action, they would like to implement everything (monitoring, certification, energy audits, retrofits) but it takes time for owners to accept the investments and they want

“The other challenge is that the market in UAE (clients are ready; but the support industry like banks are not) is not ready for more advanced support from the energy management company.”

A systematic approach Sustainability must be approached through systems thinking, as does facility management. Systems thinking is a holistic view — a process of understanding how things (i.e., people, departments and output) influence one another within the whole as they work together to make an organisation healthy or unhealthy.

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guarantees for the savings.” Simon Roopchand of Emrill agrees: “And for buildings which are recent, it is not too late. Your building is most probably more efficient than older ones but once it has reached its cruise level with a stable occupancy, the earliest the adjustments in efficient solutions, the stronger the profits for longer years.” Trust factor of new technologies or the choice amongst too many possible suppliers can lead to a freeze of the decisions and hence the need for a consultant to guide clients to the right technology is crucial. La Briavant is sure that it is important: “It is proven that energy savings measures are amongst the lowest risks investment

MAY 2013

for the highest returns and all owners should consider this action as a priority for a healthy business and to better manage the risks. Who knows if electricity will not increase again by 120% like it did between 2009 and 2011 and water by 40% for the same period? Pay backs are usually from one to three years for the good solutions, and they are installed for 10-30 years, providing savings every year.” It seems that the major problems in FM advances into energy efficiency is apparently the apathy of tenants, together with the reluctance of landlords to actually implement change. So the FM message is clear. They are leaders, not followers and they are ready to lead the way into a greener future.n

It focuses on cyclical (whole cycle assessment) rather than linear cause and effect and concerns an understanding of a system by examining the linkages and interactions between the elements that compose the entirety of the enterprise. A major component of facility management is the ability to view problems and solutions as part of an overall process rather than reacting to a specific part, outcome or event. Everything has to be taken into account where operations and procedures are implemented — avoiding quick fixes that could lead to unintended consequences.

June 11 – 13, 2013 Dubai, United Arab Emirates

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UNIPODS advertorial

Challenging traditions Sadig Abuagla explains why contractors and developers are adopting off-site building solutions ensuring consistently high quality levels. This means that contractors can meet more demanding build schedules and there is less need for skilled labour. All the services are installed before the pod is delivered, and decoration is also carried out off site. All the need to be done on site is to crane the bathroom pods into position and connect them up. Unipods’ latest project “ARAC Hotel” was the first hotel in Makkah, KSA to use bathroom pods and is a good example of the benefits that Unipods is capable of providing to their clients. Construction in Makkah requires an extensive amount of time; rock-drilling due to the terrain; therefore, using a bathroom pod shortens completion time by two to three months. Though prefabricated bathroom units are seen as a relatively new concept, they have in fact been used successfully by the off -site construction industry for some time. In fact, Europe has been building with modular bathrooms for over 30 years and most commercial contractors in Europe refuse to build without them.

“Our biggest challenge has been to convince clients to use bathroom pods instead of traditional built bathrooms. However, our formers clients have been very pleased with the concept and requesting the use of modular bathroom pods for their upcoming projects.” Abuagla added. “A common perception in the Middle East is that modular construction forces the use of generic fixtures and that control over design is lost, but that doesn’t reflect the way construction technology has advanced,” Abuagla insists. All of Unipods’ modular bathrooms are built to the client’s exact specifications, including the size of the bathroom, the layout, and the fixtures and finishes in the bathroom as well. It would seem that completely customised, fully-equipped, factory-made bathroom pods are the wave of the future and can help builders increase their efficiency and decrease their costs. Now the only question is whether construction professionals will take the plunge and try something new. n

MAY 2013

MIDDLE EAST

inding a more affordable and efficient way to build is the main priority for construction companies in the Middle East today. Contractors and developers are adopting off-site building solutions to have more control over cost and quality, as well as a means to achieve significant time saving. Unipods is a member of the Al Rajhi Holding a Saudi-based Group with investments in many companies across the UAE. Sadig Abuagla, Unipods’s head of marketing, argues that Unipods modular bathrooms, offer the best of both traditional and modular construction since they provide the advantages of modular construction, but can also be easily integrated within traditional construction projects. Since bathrooms are one of the most complicated and time-sensitive part of a construction project, building with bathroom pods will provide many advantages such as reducing a construction schedule by 20-30%. Another advantage of pods is the fact that they can be built off site, saving valuable installation time on site, and

COMMENT DLA PIPER

bigprojectME.com

Keith Kilburn, Thomas George

KEITH KILBURN

The Middle East’s maturing dispute resolution market Keith Kilburn, senior legal consultant, and Thomas George, legal consultant, of DLA Piper, explain the changing trends in dispute resolution

D THOMAS GEORGE

uring 2012 we saw a significant increase in dispute resolution cases across the region, particularly within the construction sector, and it looks certain that this trend will continue throughout 2013 and potentially beyond. This trend is due partly to the increase in the use of arbitration as a form of dispute resolution as well as the unprecedented number of disputes arising out of the global financial crisis. With changes in the regulatory environment across the region and internationally, the landscape is set to evolve further . Outlined below are our some predictions as to the changes in store for the region during 2013. UAE We maintain high hopes that the Federal Arbitration Law will come into force, improving the procedural framework for arbitration in the UAE. However, past experience and the absence of any recent publicity lead us to believe that we should not expect this development in the imminent future. It is likely that the UAE will see a continued increase in construction related disputes, as suspended and terminated projects continue to feed

MIDDLE EAST

“A lot of dispute work will continue to stem from the effects of the global financial crisis, which are continuing to be felt”

MAY 2013

through the system following the global financial crisis. Dubai The disputes market will maintain a high level of activity throughout 2013. A lot of dispute work will continue to stem from the effects of the global financial crisis, which are continuing to be felt, particularly within the property and constructions sectors. However, we are already seeing disputes arising from the recovery, and the issues which stem from the re commencement of stalled construction projects and other developments, and we expect this category of dispute to come to the fore as the year progresses. The Dubai International Financial Centre We expect the DIFC Court to see an increase in the number of referrals during 2013. Those referrals are likely to include an increasing number of disputes commenced by companies (and in particular financial institutions) seeking to take advantage of the new “opt in” jurisdiction of the DIFC Courts . In addition, given the extensive publicity that the two decisions in Injazat and International Electromechanical Services (relating to the stay of DIFC Court proceedings in connection with non-DIFC seated arbitrations) have received, we expect that an appropriate amendment to the DIFC Arbitration Law will be made, bringing DIFC law in line with the UAE’s treaty obligations under the New York Convention.

COMMENT DLA PIPER

unrest in the country and we currently see little appetite for investment in projects. Notwithstanding this, we expect the BCDR-AAA to continue to see a modest volume of cases referred to it through its statutory arbitration legislation. It is fair to say that the market for dispute resolution in the Middle East has undergone significant transformation over the last five or so years, with the global financial crisis marking perhaps something of a turning point. Preeconomic crisis, there was certainly a greater emphasis on the “cultural” taboo of formal dispute resolution, whether by way of litigation or arbitration. The strong economic environment of the time supported that approach,

Saudi Arabia With the publication of Saudi Arabia’s newly reformed arbitration law last year , we expect to see a moderate rise in activity relating to the enforcement of foreign seated awards in Saudi Arabia. It will also be interesting to see how early plans to establish an offshore dispute resolution centre in London for the determination of commercial disputes arising in the Kingdom will develop during the course of the year. Bahrain While the BCDR-AAA (the joint Bahrain Ministry of Justice and American Arbitration Association arbitration centre in Manama) remains one of the most exciting developments in regional dispute resolution in recent years, the centre, as well as the construction sector more generally, has been affected by the recent

“With the financial crisis and the evaporation of new projects, parties were left to resolve their disputes either by agreement or formal dispute”

particularly in the construction sector when disagreements between project participants were often resolved by reference to a deal on the next project in the pipeline. With the onset of the financial crisis and the evaporation of new projects, parties were left with little choice but to resolve their disputes either by agreement or formal dispute. Doing so by agreement has not been an option in many cases where the money had simply run out. Post-crisis, it seems that proceeding down the path of a formal dispute resolution process is more and more becoming a reality of doing business in the Middle East, without the negative connotation that may have once existed. We see that trend continuing, and indeed, a necessary by-product of any maturing dispute resolution market. n DLA Piper is a global law firm that operates in Dubai across a number of practice areas including real estate, projects and finance, litigation and restructuring.

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Qatar Given the increasing number of high value construction projects that are underway in connection with the new Doha airport launch, the World Cup 2022, and related infrastructure projects we expect to see a rise in activity in the Qatar disputes arena throughout 2013. We will also be keeping a close eye on the QConstruct consultation and implementation process, as it is understood that the aim is for this new adjudication scheme to “go live” during 2013.

COMMENT BIM

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ZOLNA MURRAY

Zero Fluff Policy (ZFP) BIM expert Zolna Murray presents an alternative to the British Government’s way of mandating BIM on AEC projects.

he British Government has got it all wrong with regards to its plan to use BIM to fix-up its ailing AEC industry. Admittedly, they weren’t exactly calling the industry ‘ailing’; neither where are they labelling BIM specifically as a ‘fix up-tool’, but that is what I read between the lines of both the original Strategy Paper published in 2011 and the “Pipeline for Growth” report that was put out at the end of 2012. Most of BIM commentators, even those a bit remote from that particular market and ones that are normally prepared to be a bit cynical of ‘artificially pumped up BIM hype’ appear to find this government’s actions to be all positive. Their comments echo the official mantra, with its coats of sugar. They then add their own truckload of PC type encouragement, about how every step in the right direction counts, how time will tell, how the proof will be in the pudding, how one must not discourage the proactive governments by criticising them, how absolutely fabulous and brave they are and so on so forth. Anyway, why get bogged down with the details when top experts in the field are publically declaring that the British BIM model is the best in the world already? Time will tell, I believe, how silly, ineffective, pompous and arrogant this approach is (was) but it will take years, decades even – thanks to the fact that the

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“Why not be bold now and try out something that I guarantee will make a positive difference to the industry and deliver results within 12 months of its launch?”

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wheels of the global (and especially bigbusiness) AEC market grind even slower than those of justice systems. So why wait for the grinding to be fully completed and the ashes of failed BIMs to finally get scattered over the corpses of many, at present still yet-to-be built, public buildings? Instead why not be bold now and try out something that I guarantee will make a positive difference to the industry and deliver results within 12 months of its launch? And just to make it more palatable for those that like to be prescriptive on the subject of how as opposed to the what, this is a highly prescriptive approach. I call it the XXX Government’s (or any public/private AEC client that is now/or intending in the future to consume the services of the AEC industry) approach: The Zero Fluff Policy (ZFP) ZFP is built on a set of highly prescriptive requirements on how project information should be managed (by all info originators and/or editors, like design consultants, main and subcontractors) on any AEC job: The rules are as follows n PDF – paper-sheet based and formatted, traditionally labelled, revision controlled, clouded drawings will be used for all communication between all parties and at all times, regardless of the stage of the project and/or the number of participants involved in the project. n The numbers of drawings in the system will be strictly (and drastically) limited and policed relentlessly. n All drawings will be managed electronically on a web based, fully searchable system. All drawings will have

COMMENT BIM

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meta-data attached to aid search. n No written specifications will be allowed, everything will fit on the limited number of drawings (typically no project will produce more than 100 drawings; at an absolute, a mega project may go up to 250). n No duplication of information will be tolerated, any discrepancy in information supposedly coming from one source found, will be rejected immediately and the originator penalised heavily. n All drawings will be fully coordinated and buildable at any time, even at early stages of the project, taking into account detail levels appropriate for design development. All drawings issued will always be of IFC quality, labelled such and an individual to take responsibility for this by a signature. n The said individual will be made aware by the employing company that mistakes within the IFC documents will be traced back to him (or her) no matter how many companies he/she changes to escape being accountable for the flow on impacts those mistakes cost the project once construction begins.

MAY 2013

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n All drawings will be audited regularly (weekly) by an Independent BIM Authority and their comments forwarded to drawing authors. Immediate response will be required by all affected. Failure to respond in time or any repeated offence will be punished by dismissal of the entire company from the project. n All participants will be contractually bound to pay SILD (Substandard Information - Liquidated Damages) – and these will be assessed monthly (based on failures to meet any of the requirements falling under points 1 – 5); n SILD will be deducted from progress payments or if they turn out to be higher than progress payments due, from a bond provided by all contracted project participants at the outset of the project. n SILD collected will be split into 3 equal parts and distributed monthly: 1 third to the IBA (Independent BIM Authority) agent on the project for work well done; 1 third to the client representatives on the project for accepting this crazy policy and 1 third shared out in the form of creamdoughnuts to regular citizens walking past the project in question; n The acronym ‘BIM’ and anything associated with it will be exclusively used by those employed by the Independent BIM Authority; Any unauthorised and careless use of the term (or its derivatives) will be punished by dismissal.

Zolna Murray is a BIM expert with extensive experience working in the region. She blogs at www.debunkthebim.blogspot.ae

TENDERS

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TOP TENDERS QATAR Tender Design and build (DB) contract for QENFB access bridge to a port Client New Port Project Steering Committee (Qatar)

Post Date 25/03/2013 Closing Date 08/08/2013 Tender Number NPP/0046

Tender Provision of consultancy services for information technology governance and control for a gas processing company

Tender Provision of transportation services for the staff and school to an industrial company

Tender Provision of bolt torqueing and on-site machining services on call-off contract for a gas processing company Client Oryx GTL (Qatar)

Client Qatar Vinyl Company (QVC)

Post Date 07/04/2013

Post Date 24/03/2013

Client 08/05/2013

Closing Date15/05/2013

Tender Number TC-CN-021-13-MN

Client Oryx GTL (Qatar) Post Date 07/04/2013 Closing Date 08/05/2013 Tender Number RFQ/2063/13/AB Tender Number STC-CN-031-13-IT

Tender Provision of front-end engineering and design (FEED) services for the upgrading and construction of various roads in a community and industrial areas

Client Dolphin Energy Ltd (Qatar)

Client Qatar Petroleum (QP)

Post Date 10/03/2013

Post Date 02/04/2013

Closing Date 14/05/2013

Closing Date 19/05/2013

Tender Number ITT-DC-QOP-754

Tender Number GT13103900

MIDDLE EAST

Tender Provision of subsea inspection and maintenance services for the offshore assets of a gas processing company

MAY 2013

BOOK YOUR STAND TODAY To enquire about exhibiting email Patrick Gedeon on patrickgedeon@dmgeventsme.com or call +971 (0)4 445 3639

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TENDERS

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

UAE Hotel Residences Tower Project - Dubai Maritime City Development

Project Number BIP138-U Territory Dubai Client Name Damac Properties (Dubai) Address 4th Floor, Al Moosa Tower II, Sheikh Zayed Road City Dubai Postal/Zip Code 2195 Country UAE Phone (+971-4) 390 8804 / 399 9500 / 332 2005 Fax (+971-4) 332 1874 Email info@damacgroup.com Website www.damac properties.com Description Construction of a new luxury tower consisting of serviced hotel residences at Dubai Maritime City Development. Status New Tender Tender Categories Construction & Contracting, Hotels, Leisure & Entertainment Tender Products Residential Buildings

Solar Farm Project

MIDDLE EAST

Project Number BIP124-U Territory Sharjah Client Name Proventus Renewables PLC (UK) Address 2 Mill Street, Bedford

MAY 2013

MK40 3HD City London Country United Kingdom Phone (+44-203) 006 3247 Email info@proventus.co Website www.proventus.co Description Construction of a solar farm with capacity of 5 MW. Status Current Project Main Contractor ABC Facilities Management L.L.C (Dubai) Tender Categories Power & Alternative Energy Tender Products Solar Energy

Millennium Estates Development Project

Tender Products Villas Construction

Project Number BIP133-U Territory Dubai Client Name Meydan L.L.C (Dubai) Address Meydan Racecourse, Al Meydan Road, Nad Al Sheba City Dubai Postal/Zip Code 9305 Country UAE Phone (+971-4) 327 0000 Fax (+971-4) 327 0007 Website www.meydan.ae Description Development of Millennium Estates residential scheme comprising luxury villas Budget $326,000,000 Period 2015 Status New Tender Tender Categories Construction & Contracting

Mixed-use Development Project - Meydan City

Project Number BIP117-U Territory Dubai Client Name Sobha Group (Dubai) City Dubai Postal/Zip Code 52687 Country UAE Phone (+971-4) 886 7500 Fax (+971-4) 886 7800 Email enquiry@sobha-me.com Website www.sobha-me.com Description Development of a mixed-use scheme comprising a shopping mall, villas, apartments and hotels. Budget $3,000,000,000

Period 2020 Status New Tender Tender Categories Construction & Contracting, Hotels, Leisure & Entertainment Tender Products Hotel Construction, Mixed-use Developments, Residential Buildings, Retail Developments

Saudi Arabia Substation Construction Project - King Abdullah University of Science & Technology

Project Number BIP130-SA Territory Saudi Arabia Client Name Saudi Electricity Company - Central Region (Saudi Arabia) Address Burj Al Faisaliyah Bldg.,

TENDERS

Mutrafiah Housing Project (Phase 1) - Jubail Industrial City

Project Number BIP120-SA Territory Saudi Arabia Client Name Saudi Arabian Mining Company (MAADEN) City Riyadh 11537 Postal/Zip Code: 68861 Country Saudi Arabia Phone (+966-1) 874 8000 Fax (+966-1) 874 8300 Email info@maaden.com.sa Website www.maaden.com.sa Description Execution of a housing project in Mutrafiah involving construction of (800) villa - Phase 1 Budget $270,000,000 Period 2015 Status Current Project Project Manager AECOM (Saudi Arabia) Main Contractor Azmeel Contracting & Construction

Corporation (Saudi Arabia) Tender Categories Construction & Contracting Tender Products Residential Buildings, Villas Construction

Madina Prophets Mosque Expansion Project

Project Number BIP113-SA Territory Saudi Arabia Client Name Ministry of Finance (Saudi Arabia) Address Airport Road City Riyadh 11177 Postal/Zip Code 6902 Country Saudi Arabia Phone (+966-1) 405 0000/ 405 0080/ 405 5000 Fax (+966-1) 405 9202/ 403 5422 Email info@mof.gov.sa Website www.mof.gov.sa Description Expansion of Madina Prophets Mosque to accommodate more than 1.6-million worshippers Period 2015 Status New Tender Tender Categories Roads,

Bridges & Infrastructure, Construction & Contracting Tender Products Civil Works, Construction & Addition Works, Roads Construction

â&#x20AC;&#x2030;Bahrainâ&#x20AC;&#x2030; Diyar Homes Project Phase 2

Project Number BIP136-B Territory Bahrain Client Name Diyar Al Bahrain (Bahrain) City Manama Postal/Zip Code 13388 Country Bahrain Email info@diyaralbahrain.com Website www.diyaralbahrain.com Description Construction of Diyar Homes comprising (180) villas Status New Tender Main Consultant Mohammed Salahuddin Consulting Engineering Bureau - MSCEB (Bahrain) Main Consultant-2 URS Corporation (Abu Dhabi) Main Consultant-3 Haj Gulf Quantity Surveyors (Bahrain) Tender Categories Construction

& Contracting Tender Products Villas Construction

Muharraq Theme Park Project

Project Number BIP126-B Territory Bahrain Client Name Muharraq Municipality (Bahrain) City Muharraq Country Bahrain Phone (+973) 1732 2188 Fax (+973) 1733 3093 Description Construction of a Theme Park featuring an ice arena, aquarium, karting track and amusement rides, including large green areas, restaurants, a fitness club and gymnasium, an elderly centre and family resting areas. Budget $47,000,000 Status New Tender Tender Categories Construction & Contracting, Leisure & Entertainment Tender Products Commercial Buildings, Theme Parks Development

MAY 2013

MIDDLE EAST

Floor 22, King Fahad Road City Riyadh 11416 Postal/Zip Code 22955 Country Saudi Arabia Phone (+966-1) 461 9030 / 461 9009 Fax (+966-1) 403 2222 Email informus@se.com.sa Website www.se.com.sa Description Construction of 110/13.8kV capacity substation at King Abdullah University of Science & Technology (KAUST-2) Budget $20,000,000 Period 2015 Status Current Project Main Contractor Nesma & Partners Company Ltd. (Saudi Arabia) Tender Categories Power & Alternative Energy Tender Products Substations Construction

DIARY MAY

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MENA 2012 Project Qatar Doha, Qatar 6 – 9 May, 2013

Project Qatar will be back for its 10th edition from May 6th - May 9 2013. This highly successful show is the 10th International Trade Construction, Building, Environmental Technology & Materials Exhibition. The event attracts key buyers and industry leaders looking for the most up-to-date technology and state-of-the art equipment available on the market. Qatar Stonetech Doha, Qatar 6 – 9 May, 2013

The 2nd International Stone and Stone Technology Show brings together top regional and international distributors, suppliers, manufacturers, agents and engineers, at the heart of Qatar’s booming construction industry. Heavy Max Doha, Qatar 6 – 9 May, 2013

The 2nd International exhibition for heavy machinery attracts manufacturers and suppliers from the

world’s leading brands. Heavy Max showcases the latest in construction machinery, equipment, systems and materials.

HAPPENING THIS MONTH...

Energy Qatar Doha, Qatar 6 – 9 May, 2013

International

Energy Qatar 2013, the International Electrical Engineering, Power Generation & Distribution Exhibition, is the ultimate platform for launching innovative products and services, strategic planning, environmental friendly approaches and technologies in cost effective and resourceful ways. Energy Qatar 2013 is tapping into an affluent market that aims at staying one step ahead of its booming economy’s demands.

across the GCC. The programme recognises, celebrates and rewards the project owners and key project teams who completed the highest quality projects in the GCC from January 2011 until December 2012.

MEED Quality Awards for Projects 2013 Abu Dhabi, UAE 14 May, 2013

The MEED Quality Awards for Projects, in association with Ernst and Young have become the premier competition within the construction projects industry to recognise outstanding construction projects

Hardware+Tools Middle East Dubai, UAE 11 – 13 june, 2013

The 14th edition of the international trade fair for tools, hardware, materials and machinery. Hardware+Tools Middle East is the perfect platform to meet new contacts, discuss new trends and technological developments, keep up to date with industry knowledge and source new products and solutions.

International Building & Construction Trade Fair Shanghai, China 28 - 31 May 2013

International Building & Construction Trade Fair is an international exhibition related with the sector of building and construction. This show brings exhibitors from all around the globe to actively participate in this grand event that helps them to enhance their business prospective and scope. The expo presents a wide range of opportunities to the exhibitors to network with the attendees and to establish good relationship with them.

Baghdad Oil & Gas Conference and Exhibition Baghdad, Iraq 01 - 04 May 2013

MIDDLE EAST

Baghdad Oil & Gas Conference and Exhibition is a great event for the oil and gas industry where all the great experts accumulate to share their innovative ideas and ground

MAY 2013

breaking experiences to facilitate further progress for the entire discipline. Businesses get the chance to foster stronger business relations and professional networking while displaying the products and services which their clientele can make use of.

Greater Philadelphia Building & Facility Maintenance Show Philadelphia, USA 1 - 2 May 2013

Being hosted by Maintenance Shows of America, Greater Philadelphia Building & Facility Maintenance Show is an entrusted show for displaying elevators, constructional tools & machinery, floor covering, ceramics & tiles, doors & services. For 2 days, it will be held at Greater Philadelphia Expo Centre, Philadelphia, USA and will prove to be highly effective in attracting industrial professionals from throughout the world.

CONSTRUCTIVE CRITICISM

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Look at the Big Picture The Development Review Stream by the Abu Dhabi Urban Planning Council is an indication that we need to start looking at all aspects of construction during the design process. GAVIN DAVIDS

Abu Dhabi’s Urban Planning Council has announced that it plans to launch the new ‘Development Review Stream’ for new construction in the UAE capital. In essence, the new system offers consultants and developers a streamlined approval process for their designs. While the move is certainly welcome, and will certainly help make things a lot easier for everyone involved in the construction process, what I thought was quite interesting was that the system aims to tie in with and compliment the Estidama process. Basically, the DRS system will look to encourage designers to look at the ‘whole life cycle costs throughout the design, development, construction and operation of their projects’.

MIDDLE EAST

“Sustainability has to be a code, a way of life that the construction industry should embrace across all levels”

MAY 2013

We’ve heard a lot of talk about sustainability lately, much of it being nothing more than lip service. It’s in danger of becoming a cliché, but I think that with legislation from across the construction spectrum now coming into play, we could see some real gains taking place. Sustainability has to be a code, a way of life that the construction industry should embrace across all levels. It’s no good trying to introduce sustainable design and buildings when your construction process sees your carbon emissions rise to stratospheric levels. It’s about adopting a holistic approach to the entirety of the construction process. As such, something like the Development Review Stream, will see a lot more thought go into how we build our projects. Not only will this send out a strong message, that we’re serious about sustainability, it will also encourage best practices and help minimise the cutting of corners. It’ll be tough initially, but I think the effort will be worth it. n

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