Construction Business News ME - October 2015 by BNC Publishing

October 2015

THE DEFINITIVE GUIDE TO THE REGION'S CONSTRUCTION PROFESSIONALS

A growing market at the Gulf’s back door is giving companies a reason to map out a plan of action for tackling Africa

A report on Qatar’s record breaking infrastructure projects that will pave the way for the state’s next wave of growth

An analysis of the optimistic side of plunging oil prices and economic uncertainty in construction

Experts discuss the role of greenwashing in Middle East’s sustainable construction industry

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contents 6 Editor’s Note 8 news 18 in person Peter Vogel, director of

doka Middle East, talks about innovation as an art of problem-solving and making construction processes more efficient, sustainable and safe

analysis

22 shivram mukherjee

writes about energy consumption trends in the middle east to suit high levels of power demand

24 Joanne bladd analyses

the optimistic side of plunging oil prices and economic uncertainty

34 COUNTRY FOCUS A report on qatar’s

record breaking infrastructure projects that will pave the way for the state’s next wave of growth

Real estate

40 news update of the latest project launches at cityscape global 2015

44 Matt Dadd writes

about how new mall developments would draw tourism from the gcc and internationally to dubai

cover story

INTO AFRICA

A growing market at the Gulf’s back door is giving companies a reason to map out a plan of action for tackling Africa

construction business news me October 2015 3

CONTENTS

66 48

Managing Director Walid Zok walid@bncpublishing.net Director Rabih Najm rabih@bncpublishing.net Director Wissam Younane wissam@bncpublishing.net Group Publishing Director Diarmuid O'Malley dom@bncpublishing.net Business Development Director Rabih Naderi rabih.naderi@bncpublishing.net +966 50 328 9818

Group Editor Melanie Mingas melanie@bncpublishing.net

46 technology dr asif sharif, regional director of conject, explains that not all project collaboration solutions are built the same

48 PROJECT update Dmcc along with as+gg unveil burj2020 district at this year’s cityscape global

50 SUSTAINABILITY Construction Business News ME speaks with sustainability

experts to discuss the role of greenwashing in Middle East’s construction industry

gcc governments are imposing new standards to minimise greenhouse gas emission and limit resource depletion. Construction companies can play a direct role in this process

58 Q&A As the uae massively invests to improve its healthcare sector

to match world leaders, ceo of enova alexandre mussallam speaks with construction business news me about the current challenges faced in energy and facilities management

24 COMMENT Edward mccluskey, partner at arcadis, analyses the common construction disputes in the region and discusses how to handle them

60 62 64 66

Suppliers Event preview save the date editor’s pick

4 construction business news me October 2015

Editor Lorraine Bangera lorraine@bncpublishing.net Art Director Aaron Sutton aaron@bncpublishing.net Sales Manager Mostafa Abdo mostafa@bncpublishing.net +966 56 6695 333

Marketing Executive Mark Anthony Monzon mark@bncpublishing.net

c o n t ribu t o rs Stuart Matthews

Marlow McGuinness Ltd ------Joanne Bladd

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sales@bncpublishing.net T +971 55 339 5097 All rights reserved © 2015. Opinions expressed are solely those of the contributors. Construction Business News ME and all subsidiary publications in the MENA region are officially licensed exclusively to BNC Publishing in the MENA region by Construction Business News ME. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission of the publisher. Images used in Construction Business News ME are credited when necessary. Attributed use of copyrighted images with permission. All images not credited courtesy Shutterstock. Printed by International Printing Press www.ippuae.com

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NEWS

editor’s note Africa Rising

Once deemed as a “hopeless continent” by the Economist, Africa has had a definite turnaround in the last two decades. Endowed with bountiful natural resources such as oil, gas and uranium, agricultural commodities, and water, it was only a matter of time before the potential would be realised. Consisting of the fastest growing economies in the world, today it is appropriately associated with being termed the continent of the future. The International Monetary Fund’s 2014 World Economic Outlook report states that six of the 10 fastest growing economies are in Africa: Mozambique, Rwanda, Angola, Nigeria, Chad, and Ethiopia. The GCC has historic, economic and cultural ties with Africa dating back centuries. After a long silence in the 1990s and 2000s, the GCC is finally partaking in a string of potentially highly lucrative partnerships. China for one seems to have recognised Africa’s potential with increasing investments in construction from 19% in 2013 to 31% in 2015. According to the Dubai Chamber of Commerce and Industry, annual GCC investments to Africa are expected to average $5bn in the coming years. Many factors work in favour as both parties could reap benefits from mutual partnerships. The UAE specifically has made an increased effort to work with African nations and local newspaper Gulf News reported that Dubai’s trade with Africa has increased to $25bn in the last decade. Arqaam Capital’s GCC-Africa Investors Conference in Abu Dhabi on September 14, 2015 attracted companies from across

6 construction business news me October 2015

the Middle East including Etisalat, DP World, Damac, Depa, KIPCO, Emirates NBD, and NBAD. Riad Melti, CEO of Arqaam Capital, explained that the African continent presented a mixed outlook, highlighting that while some non-oil economies were faring pretty well, commodities-driven economies were struggling with slow growth and weakening currencies. There are challenges – delays in client decision making can cause projects to overrun on time and budget. The quality of materials can vary wildly from one area to another and there is lack of consistent labour supply across the continent. Africa can only rise if its foundations are strong. Prioritising improvement region by region, PwC says East Africa must work to improve project finance and its regulatory environment; the west must work on procurement and scheduling; and the southern countries, risk management and upfront planning. According to Deloitte’s African Construction Trends Report 2014, energy and transport are key focus areas for investment as Africa’s emerging nations move towards building better infrastructure. The report stated that though the number of projects in 2014 (257) had significantly dropped since last year (322), the total value of the projects under construction had increased to $325,828m from $222,767m. Further, 65% of energy and power projects under construction are renewable energy projects, giving the nations a chance to begin with sustainable development from the start.

Construction activity in East Africa in particular shows strong diversification, with signs of a mature and competitive industry. Even though Dubai plans to position itself as a gateway to Africa, most GCC countries still see hindrances in political risks, instability and currency volatility. It is definitely a debatable choice. On one side, it could benefit the region tremendously if the investments pay off, working closely with African nations would be favorable geographically and culturally. However, with all the uncertainty about the risks it is up to each GCC nation to make the choice to dip or dive. Making its way through recent political struggles and the Ebola crisis, I personally think it would be a shame not to bet on a continent that has proven it can endure just about anything.

Lorraine Bangera Editor

construction business news me October 2015 7

NEWS

GCC construction contracts to fall $2bn The total value of construction contracts by the close of 2015, could be down $2bn following a dramatic decrease in oil prices. Data from Ventures Onsite, produced for The Big 5, states the total value of construction contracts last year stood at $196bn, and this year is predicted to close at $194bn, although it will be some months before the numbers can be confirmed. The results come despite Ventures Onsite predicting for much of the year that contracts would actually increase 4.5% this year, reaching $205bn by year end. The drop is largely being attributed to the drop in oil prices. Andy White, the vice president of The Big 5 show organiser dmg events ME, said: “A lot has been said about how oil prices might affect construction markets. But each of the GCC nations has continued to invest heavily in infrastructure such as housing and healthcare. “Kuwait has more than trebled its contract awards this year, the Saudi government has made it clear that it will continue to invest, and the UAE has revealed more spectacular projects.”

Share of projects across the GCC

Saudi Arabia - 44%

UAE - 31%

Qatar - 11%

Kuwait - 6%

8 construction business news me October 2015

13% CAGR construction chemical growth for Qatar The value of construction chemical sales in Qatar is forecast to grow at 13% CAGR, between 2015 and 2020, according to data released by research compay TechSci. The increase has been attributed to increased demand for housing, as well as construction of many infrastructure projects such as airports, subways, tunnels, damns, highways, bridges, railway networks, power plants as a part of preparations for upcoming FIFA World Cup in 2022. “Post 2014, infrastructure sector is expected to pick up on account of various government initiatives, especially increasing construction activities for FIFA World Cup, 2022, and implementation of Qatar National Vision 2030 program. This push in construction sector is expected to boost construction chemicals market in Qatar over next five years,” said Mr. Karan Chechi, research director with TechSci Research, a research based global management consulting firm.

70% of projects do not utilise project collaboration systems As many as seven out of 10 projects in the region do not utilise project collaboration technology, according to research conducted by Conject. In a survey of existing and prospective clients, the firm discovered that a mere 30% of projects in Qatar and similar numbers in other GCC countries fail to benefit from collaborative software. Writing for Construction Business News ME, Conject GM and regional director, Dr. Asif Sharif, cited such excuses as cost, duration of project and necessity for physical documentation in addition to digital. Speaking specifically about invest-

ment costs, he said: “The level of investment could be as little as 0.5% of the overall project value, so in real terms this might be considered a small investment, capable of delivering considerable cost and time savings on the project particularly if there is a dispute on the project. “In addition, cloud based collaboration solutions provide huge flexibility to the user, easily enabling them to ramp up or scale down usage in line with the user community, in other words matching the software requirement to the stage and profile of the project.”

Construction in Mecca

Saudi Binladin Group sees all contracts suspended Saudi Binladin Group will keep its existing contracts but will not be awarded any further work from the Saudi Arabian Government following the crane collapse in Mecca last month, which killed more than 100 people and injured more than 200. While existing contracts are currently under review by the Finance Ministry, no decision has been made on

whether these will be revoked. The ban on new contracts will last at least until legal action against the group has been concluded, according to reports by Reuters. The contractors insurers, United Cooperative Assurance (UCA) feel 2.5% as the group began its claims procedure following the accident on September 11, 2015.

$7.98bn design projects confirmed for region Demand for new hotels, retail, commercial and education facilities, as well as hospitals, has increased the value of interior design contracts to $7.98bn, preceding last yearâ&#x20AC;&#x2122;s total of $7.35bn. However, according to the organisers of the Leaders in Design MENA Summit, owners and employers on the other hand are suffering with what is known as â&#x20AC;&#x153;decision overload.â&#x20AC;?

This is caused by being faced with too many options, such as the design style, cost, time and many other specifications they have to sift through in order to find the one they have been searching for. This is not bad news for designers and architects hoping to develop some clients in the region as there will always be someone looking for a different style and offer to what to

has previously been showcased to them. There are plenty of opportunities out there in this sea of business but it takes some networking and recommendation to get designers the kind of deals they are looking for and not just swimming alone in the deep.

Leaders In Design MENA will take place in Dubai, from November 15. construction business news me October 2015 9

NEWS

Iranian companies to construct dams in Oman Iranian companies are set to construct dams in Oman according to Iranian Energy Minister Hamid Chitchian, Mehr News Agency reported. Oman’s Minister of Regional Municipalities and Water Resources Ahmad bin Abdallah bin Muhammad al-Shuhi met with Chitchian in Tehran to discuss potential opportunities to work together. Chitchian referred to it as a positive atmosphere of cooperation between Iran and Oman. He said: “It has been decided to form a technical committee to investigate possibilities of joint collaboration with Oman in details.” The said committee would set the stage for the presence of Iranian companies in Oman for the dam construction. The minister said that majority of the negotiations made with Oman focussed on water resources studies and management. “The two sides also agreed to exchange experiences in the field of water resources, studies, rules, and regulations.” Al-Shuhi added: “We are seeking to use Iran’s experiences in terms of dam construction and transmission lines on the basis of extensive cooperation. “In addition to Iran’s Ministry of Energy, we are also interested in Iran’s private sector companies to carry out projects in Oman.”

George Berbari, CEO of DC Pro Engineering

DC Pro wins District Cooling Consultant of the Year DC Pro Engineering UAE earned its second consecutive ‘District Cooling Consultant of the Year’ award at this year’s Asia Pacific District Cooling Conference held in Bangkok, Thailand. The award recognised the company’s continuing commitment to implement new and innovative district cooling technologies that address global warming and climate change concerns. CEO of DC Pro George Berbari delivered a presentation to conference delegates that championed Tri-generation technology – a process where the simultaneous generation of elec-

tric power is synchronised with photo voltaic energy to create waste heat and produce cooling. The technique, Berbari insisted, could result in savings of up to 100,000 barrels per day in Thai oil imports. He said: “As part of our efforts to educate public and private sector entities on the advantages and benefits of district cooling in today’s ultramodern urban centres, we ensure that our designs and recommendations are in accordance with international efforts to address the spectre of global warming and climate change.”

Investor confidence boost for egypt Colliers International released its comprehensive report, The Greater Cairo Real Estate Market Overview, in September 2015. The report, which highlights the latest trends in Greater Cairo’s residential, retail, hospitality and office segments, indicates a strong performance and positive outlook across all sectors owing to increased consumer and investor confidence as economic

10 construction business news me October 2015

stability returns to Egypt’s key market. Ian Albert, regional director at Collier International said: “Over the last four years we have seen a palpable change in investor appetite towards the Cairo real estate market. The infrastructure and real estate megaprojects driven by the government and international investors have undoubtedly had a positive impact on the economy. These

projects have the potential to significantly change the economic landscape of Egypt, and yield additional benefits if managed effectively.” The report provides a brief overview of three national mega projects: the Suez Canal Expansion, Cairo Airport City and New Capital City, all of which it anticipates will help drive demand for additional real estate products.

construction business news me October 2015 11

NEWS

Qatar on track with more than $40bn worth of transport projects MEED’s fourth annual Qatar Transport Forum revealed that Qatar is has more than $40bn worth of planned transport projects in the pipeline. These include the expansion of Hamad International Airport (HIA) and Hamad Port, the Doha Metro and long-distance passenger and freight network, and the expressway programme. Other projects showcased included the two additional container terminals at Hamad Port that would increase the $7.3bn project’s handling capacity to 6 million TEUs by 2020. The first phase of the megaproject, which involved installing more pre-cast blocks than the pyramids, is due to open at the end of 2016, according to Aecom’s programme director Tim Verdon. Qatar Rail’s chief of service delivery Andrew Tailor updated the forum on Qatar’s $20bn-plus integrated transport plan. A world record 21 tunnel boring machines are being used on the Doha Metro project, which so far has completed almost 50km of tunnels. A total of 26,000 workers are working on the project, equating to more than 78 million man hours

Qatar¹s Minister of Transport H.E. Jassim Bin Saif Al Sulaiti at the MEED Qatar Transport Forum in Doha.

worked as of end of August. Work on the Lusail tram scheme is even more advanced, with four of the five stations completed, while the tender for the first phase design and build of the long-distance freight and rail network will be issued to contractors early next year. On the roads side, Eng. Nasser AlKuwari, manager of highway projects

department at Ashghal, presented an overview of the $10.8bn expressway programme. The massive project, which involves 1,000km of new or upgraded roads, 240 major interchanges and 360 bridges, has already seen 43 major contracts awarded. A total of 15 contracts are either in the market or are being prepared, while a further 23 are in the planning stage.

EGBC MEFMA panel debates fm and retrofit Trends Emirates Green Building Council (EGBC) along with Middle East Facility Management Association (MEFMA), hosted a networking event focussed on the role of facility management companies (FMCs) in the burgeoning retrofit market in the UAE and the importance of education and trained professionals in post-retrofit maintenance. The discussion was moderated by Khaled Bushnaq, vice chair of EmiratesGBC, with panellists including: Ali Al Suwaidi, board member of MEFMA; Stuart Harrison, support services director of Emrill Services LLC; and K. Anbalagan, managing partner of Proleed Mechanical 12 construction business news me October 2015

Engineering Consultancies. Key topics addressed included: training, retrofitting certifications and the importance of energy auditors in building retrofitting. Bushnaq said: “Training and trained professionals play a pivotal role when it comes to post-retrofit maintenance and the continuation of preventive care implemented in any building. One of the key purposes of the joint networking event was to put the spotlight on the current situation of training within the industry and identify next steps to follow with the aim to create a fully integrated facility management industry adequately equipped for the ‘retrofit revolution.’”

The second discussion was on retrofitting certifications, and how ISO 50001 is emerging as an important certification in the commercial sector where savings in energy management are almost guaranteed, such as in the UAE. Lastly, the panel discussed the importance of energy auditors as an essential component in the list of certified professionals needed for a building retrofit process and how FMCs can benefit from hiring certified energy auditors directly on their team as opposed to outsourcing the auditing task.

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construction news me October 2015 13 Issued by HSBC Bank Middle East Limited, P. O. Box 66, Dubai, UAE. Regulated by the Jersey Financial Services Commission and Central Bank of the business United Arab Emirates. CRN 150603 ÂŠ Copyright. HSBC Group 2015. ALL RIGHTS RESERVED.

NEWS

Ventures Onsite reveals the top 30 most expensive construction projects of the last 20 years

Kuwait

Boubyan Island Development Construction Start: Q3 2007 Completion : Q4 2033 Est. Value $6,640m Client: Ministry of Public Works (MPW)

Tehran to sign $100bn of energy deals

Bahrain

Al Madina Al Shamaliya Construction Start: Q3 2014 Completion : Q3 2019 Est. Value $4,500m Client: Ministry of Works & Housing, Bahrain

Qatar Msheireb Development Construction Start: Q2 2010 Completion : Q4 2018 Est. Value $5,500m Client: Msheireb Properties Consultant: Multiple

Saudi Arabia

UAE

King Abdullah City of Atomic and Renewable Energy Construction Start: Q1 2016 Completion : Q1 2030 Est. Value $100,250m Client: King Abdullah City of Atomic and

Mohammed Bin Rashid (MBR) City Construction Start: Q2 2013 Completion : Q4 2023 Est. Value $64,724m Client: Dubai Holding / Emaar Properties

Oman

Muscat International Airport - Passenger Terminal Ministry of Transport & Communications Construction Start: Q3 2011 Completion : Q3 2016 Est. Value $1,826m

14 construction business news me October 2015

Lifting of sanctions on Iran will lead to drastic changes as Iranian businesses open to regional and global markets, concludes the Opportunity Iran 2015 report by MEED, which reveals Tehran will sign $100bn worth of energy deals once economic sanctions are fully lifted. The main sanctions which include the United Nations, US and European Union will be lifted by the end of the year after a final assessment by the International Atomic Energy Agency (IAEA). After the lifting the sanctions, the report states that, large-scale investment in oil, gas and petrochemicals projects will be a top priority. Even though Iran has the fourth largest oil reserves and the largest gas reserves in the world, years of isolation from global markets has left the sector in need of modernisation. Iran aims to expand its oil sector in two phases; the first phase will see National Iranian Oil Company (NIOC) reviving its crude output to pre-2012 levels as sanctions relief opens up export markets; From 2020 onwards, Iranian crude capacity is set to increase and investment will allow NIOC to deploy enhanced oil recovery (EOR) technology at its older fields, revive stalled field developments, and carry out greenfield developments at untapped assets.

Saudi Arabia to cut “unnecessary” expenses Saudi Arabia Finance Minister Ibrahim Alassaf has announced the government’s decision to cut “unnecessary” expenses, including some current projects, to compensate for low oil prices, in an interview with CNBC Arabia aired during his visit to Washington D.C. last month. Alassaf said: “There are some projects like the ones that have been approved a few years ago and haven’t been carried out until now – that means such projects are not currently necessary and can be delayed.” Though the minister urged that projects that are vital to Saudi’s future economy such as infrastructure, healthcare and education projects would not be affected by this move. Reuters reported that according to International Monetary Fund and private analysts, Saudi Arabia will hit a budget

deficit of $120bn or more this year because of cheap oil. However, with financial reserves over $600bn, it is not in any particular danger in the short-term. Alassaf was visiting the US capital along with other King Salman bin Ab-

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dulaziz Al Saud, King of Saudi Arabia, and other delegates to attend the 2015 Saudi-US Investment Forum on September 4. The event aimed to highlight many opportunities that are open for Saudi and American business ventures.

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NEWS

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construction business news me October 2015 17

IN PERSON

InnovATive drive Peter Vogel, director of Doka Middle East, speaks with Lorraine Bangera about innovation as an art of problemsolving and making construction processes more efficient, sustainable and safe 18 construction business news me October 2015

Damac Towers by Paramount

ith over 150 years of experience, formworkprovider Doka prides itself in finding solutions for the most complex construction projects in the world. Founded and still owned today by the Umdasch family, Doka has proven to be a globally recognised brand in construction. Its projects have spread across continents with the most eminent ones to be found here in the GCC. Some of those projects include Dubai’s Burj Khalifa and the soon-to-be world’s largest hotel Abraj Kudai Hotel in Mecca. “Innovation is the key to our success,” says Peter Vogel, regional director of Doka. “Our core aim is to constantly adjust our services in line with customer needs, while also guaranteeing the highest safety requirements.” “Innovation is simply creating solution,” he urges. “Solutions which are highly efficient, sustainable and safe.” He adds: “It is one thing to make working with formwork easier and save more time as a result. It is quite another to make working with formwork even more safe and therefore more cost-efficient. “As a market leader, we are obliged to constantly develop new concepts and systems to support our customers’ aim

of improving speed and safety of the construction process. With our innovations, we keep ourselves always one step ahead of the competition.” A good example for such solutions is the Xsafe plus, a pre-assembled working platform that can be folded and equipped with side railings for wall and column formwork. Vogel states that his company is consistently thinking outside of the box. “We are currently working on the Strategic Tunnel Enhancement Programme (STEP) for Odebrecht in Abu Dhabi which required a special-purpose formwork solution, which we created and delivered. I think cases such as this make us add to our strength as formwork professionals.” Another recent innovation has been the Concremote system to measure concrete strength development. The system and all its results are based on the temperature of the concrete which is measured continuously. Concremote reduces striking times, optimise formwork solutions and of course visualises a lot of information about the concrete for the contractor. It is now used on various projects around the world, reaching from bridges and tunnels to high-rise towers and shopping malls. Vogel says that after its launch last year, consultants and contractors have provided positive feed

Vogel’s three-point definition of innovation: Highest Efficiency “Our innovations help to improve the speed of processes which tremendously reduce construction time, labour and consequently costs. Sustainability “Doka is conscious of its obligation to society, the environment, and its stakeholders. It deliberately invests in its employees, in measures and innovations for optimising resource consumption in minimising environmental impacts, and in nurturing its relationships with stakeholders.” Safety “Safety on the site is a great responsibility for all involved in the construction process. A professional approach to safety brings a number of significant benefits: less risk of accidents, higher efficiency from fast workflows, enhanced employee morale, and a boost to your corporate image.”

construction business news me October 2015 19

IN PERSON

Latest project review: Lusail pedestrian bridges

Doka was hired to be a part of one of the developments at Lusail City development project in Qatar. The company is set to work with builder, FCC Construction-Petroserv JV, and supply pre-assembled formwork materials for two pedestrian bridges separating the islands. The bridge design resembles a necklace with interlocking ellipses with concrete decks suspended by steel cables attached to slender pylons. The two bridges are 90m and 100m long and built simultaneously. This means the quantity of the required formwork material is almost double. In order to provide for maximum efficiency in terms of construction time, the bridge deck formwork was assembled in advance. Pre-fabrication at Doka's pre-assembly service saves time and space on site and at the same time reduces costs. The finished systems were delivered just in time by way of special shipment and immediately ready for use. “Pre-assembly of formwork systems saves us time and ensures quality,” says Victor Gomez Lopez, the FCC’s construction manager. “This process made assembling the formwork sheets on the load-bearing tower quick and easy” The initial formwork was delivered in August 2013. In-situ concrete work for both pedestrian bridges were completed on-schedule by early 2015.

back, particularly given Concremote’s cost and time saving attributes.

Integrated innovation Innovation is a philosophy that has to be cultivated by people, something Vogel believes is only possible when every employee is encouraged to communicate ideas as part of a team. Where does innovation come from? While Vogel is busy managing the regional business from his office, he says that most of the ideas needed for innovation is developed on site. “Our development department monitors the progress along with the client, which helps begin the innovation process.” He points out that clients are the first ones to expose the company to a problem, after which his team hunts for solutions. “This is how we innovate and develop, through coming face-to-face with a problem.” The constant process of problem solving doesn’t just exist among employees; it has been integrated through training and hiring who Doka considers to be the best professionals in the market. “Our employees are the reason for the company’s success. While the Doka Group is a family-owned business, intrapreneurship is highly encouraged and supported. We invest in employ20 construction business news me October 2015

Projects within the GCC: • Burj Khalifa in Dubai, UAE • Damac Towers by Paramount in Dubai, UAE • Al Hilal Commercial Office Tower in Al Maryah Island, UAE • Msheireb Downtown Doha, Qatar • Lusail Bridge in Doha, Qatar • Aishti Mall Seaside, Lebanon • Muscat International Airport, Oman • Aqaba Port Terminal, Jordan • Sabah Al Salam University City, Kuwait

Success and pragmatism

• Golden Tower in Jeddah, Saudi Arabia

Concremote

ees and put in efforts to invest in their development.”

Innovation and the GCC Vogel has worked in several countries over the last two decades, though he admits that he has been lucky to choose where he wanted to work. In the GCC, he has been active in Oman, Qatar and the UAE.

dom to be creative and innovative.” Innovation has always been welcomed with open arms in the GCC, in particular in the UAE. Some of the shifts in the regional market especially towards sustainability have predominantly affected the construction market and we welcome such developments. As a company Doka has always prioritised sustainability as one of its core values, something that enables it to offer practical support to the UAE’s federal and municipal policies on sustainable construction.

He observes that the region’s construction sector has seen consistent growth over the past decade, with a spike in activity from 2005 till the economic downturn and in spite of this, the GCC has continued to grow, citing economic diversification as a key driver. For him working in the GCC is challenging and exhilarating at the same time. “This region gives you the free-

After 22 years of management roles in the construction industry, Peter Vogel joined Doka in 2008. He says that he is more than happy to be a part of the busy and challenging GCC market where construction activities are bountiful. Before joining Doka, he worked as a technical manager in a contracting firm and has extensive experience in the construction industry. While Vogel’s practicality and drive has helped him to successfully represent a global brand in the region, it’s his insight that sets him apart from most directors. When asked for pearls of wisdom, he shrewdly says; “When it comes to success it depends on how the individual looks at success.” He argues that success is often seen in two ways: long-term and short-term. Long-term success could be challenging but we prefer to be challenged. “Typically, our projects are amongst the most complex developments in the GCC.” If you haven’t heard of Doka, a drive down Dubai’s Sheikh Zayed Road is all it takes to see the numerous projects the firm is a part of. He explains that Doka has a sincere willingness to face challenges and provide solutions. “We often invent new concepts of doing it.” In DOKA everybody is passionate about what we are doing. I’ve been in the company for eight years, and I can’t imagine finding a better company.” Vogel’s philosophy is simple. “The construction industry is pragmatic, therefore so are we.” construction business news me October 2015 21

ANALYSIS

Construction and Innovation in the UAE:

An Outlook In the wake of increasing focus on sustainability and the “go green” movement across the globe, the Middle East is also adapting its energy consumption trends to suit the high levels of power demand resulting from extremely high temperatures. Shivram Mukherjee reports

t has been reported that innovative technologies and a construction boom are driving growth in entire UAE. Dubai is set to invest AED4.5bn in ambitious real estate and construction projects to turn the emirate into “an innovation hub for global technology businesses and entrepreneurs.” The project will involve the construction of a massive new technology centre and the expansion of the Dubai Design District. It will also see Dubai become the focus of a new discussion about the importance of innovation and creativity. The current boom in the GCC’s construction sector has created lucrative opportunities for the regional and international FM companies. Figures produced by the Dubai Statistics Centre in the first half of 2014, the UAE’s construction sector made up 7.89% of the nation’s gross domestic product. Additionally, according to the Dubai Chamber of Commerce and Industry, the sector is expected to further contribute between 11 to 11.5% to the GDP from 2015 to 2021. Here are the latest Innovations in Construction.

3D Building Dubai is in line to build world’s first fully functional 3D printed building. This slated move will establish UAE's position as 22 construction business news me October 2015

Shivram Mukherjee Shivram Mukherjee, is a senior consultant with First Climate (India) Private Limited and has been associated with Climate Change Sustainability Services since 2011. He holds a B.Tech Degree in Mechanical Engineering and a Master’s Degree in Energy Management. He has worked with Dubai Municipality (as a consultant) for a Greenhouse Gas Abatement Project registered under the Clean Development Mechanism for United Nations Framework Convention on Climate Change.

global centre of 3D printing in construction and design. UAE aims to deploy the latest technologies to improve people's lives and to develop its economy in line with the country's National Innovation Strategy and the vision His Highness Sheikh Mohammed bin Rashid. Experts estimate that 3D printing technology can reduce the production time of buildings by 50 to 70%, reduce labour costs by 50 to 80%, and can save between 30 and 60% of construction waste. These savings translate to enhanced productivity, higher economic return, and increased sustainability. The “Office” will be approximately 2,000 sq.ft in size and will be printed layer-by-layer using a 20-foot tall 3D printer. All interior furniture, detailing, and structural components will also be built using 3D printing technology, combining a mixture of Special Reinforced Concrete (SRC), Glass Fiber Reinforced Gypsum (GRG) and Fiber Reinforced Plastic (FRP). This combination will make it the most advanced 3D printed structure ever built at this scale and the first to be put into actual use. The building is the result of a partnership between Dubai and WinSun Global along with leading global architecture and engineering firms Gensler, Thornton Thomasetti, and Syska Hennessy.

New law benefit innovation-based companies in TECOM Free Zone. Image courtesy of Victoria Barynova.

In addition to prototyping new technology, the 'Office' reflects the latest input from experts and researchers in workplace design and the future of work. Located at a busy intersection in the heart of Dubai, the 'Office' is designed to bring together different professionals, community members, and experts through a mix of public events. The space is open and flexible, allowing for a range of uses and team sizes. It will also feature a small digital fabrication facility and a 3D printing exhibition space.

Using sustainable wood material in real-estate sector Using sustainable wood material in the GCC construction industry would help conserve natural resources and boost the global wealth of trees. He added sustainable wood is a topic that is dominating the regional construction sector in line with governments’ vision of environment sustainability. The positive regional approach towards sustainability in the construction sector is a sign for the entire world that GCC countries are committed to preserving natural resources, of which the wood sector is a significant part A series of seminars has been held on the utilisation of sustainable wood in construction sector which is being

tailored for the regional market and the UAE in particular. Entities like Emirates Authority for Standardization and Metrology (ESMA) and Dubai Central Laboratory have discussed the local UAE standards in this field, while Dubai Municipality has organised two seminars on ‘Wood Sustainability’ and ‘Innovation in Sustainability’. The importance of wood sustainability is underlined by the fact that wood products require much less energy to be produced than concrete or steel, for example. An objective comparison of the energy needed to obtain, manufacture, transport and install building materials for identical wood frame, steel frame and concrete houses demonstrates wood’s environmental superiority over alternative materials, leading to less usage of fossil fuels and reduced air and water pollution. Although wood products make up a big chunk of all raw materials, its share of energy consumption during manufacturing is very minimal compared to other raw materials. Results show that the manufacture of wood materials uses 53% less energy than steel and 120% less energy than concrete. Wood is the world’s only renewable building material. It satisfies the four basic principles of Green Buildings to minimise the en-

vironmental impact of construction by minimizing use of energy resources and reducing pollution.

Path Forward The UAE will mark 2015 as the ‘Year of Innovation’. The announcement came in line with the directives of President His Highness Sheikh Khalifa Bin Zayed Al Nahyan. Sheikh Khalifa stressed the importance of innovation to the UAE’s strategy. The new innovation techniques in construction will pave way for UAE’s interim development and progress. It’s a primary tool to achieve Vision 2021 and an engine for the growth of distinctive skills and capabilities across the nation. The National Innovation Strategy will focus on fostering innovation in main sectors viz; construction, renewable energy, transport, education, health, technology, water and space. Thirty governmental initiatives are aimed to be taken within a three-year period in the optic of fostering innovations in these sectors, including new legislation, innovation incubators, investment in specialized skills, private-sector incentives, international research partnerships and an innovation drive within government. UAE is surely moving in the right direction in achieving three pillars of sustainability within a short span of time. construction business news me October 2015 23

ANALYSIS

Uncertain Times Plunging oil prices and economic uncertainty have sparked jitters in the GCC construction industry. But there is good reason for optimism, say analysts. By Joanne Bladd

or the GCC construction industry, August was an uneasy month. First was news of heavy losses at Dubai’s largest-listed contractor Arabtec; a first-half loss of AED1.3bn, prompting a 5.3 % slump in its share price. Then came one of the worst day’s trading in years on regional stock markets, triggered by China’s cooling economy and swelling alarm over plunging crude prices. Days earlier, global ratings agency Fitch had cut its outlook on Saudi Arabia’s economy from ‘stable’ to ‘negative’, while its counterpart Standard & Poor’s predicted an up to 20 % slide in Dubai property prices;

24 construction business news me October 2015

a bellwether for the wider region. There was much news, fretted investors, and most of it was negative. For contractors, some still nursing bruises from the 2008 financial crisis, fears were raised of a wider slowdown as Gulf states grapple with shrinking oil revenues and wider global instability. But while governments may be reining in budgets crafted in a time of $100-plus barrels, the industry still has grounds for cautious optimism. “We are not in the same place we were in 2007/2008; that is quite clear,” says Farouk Soussa, chief economist for the Middle East, Citi. “Despite spending cuts, I think there

will be a push in some construction, with transport and housing moving up the agenda. Any slowdown won’t be nearly as deep or as sharp as that seen previously.” There are clear difficulties. At the crux of market fears is the global fall in crude to less than $50 a barrel. The Gulf is sharply exposed to oil swings, with up to 80 % of regional governments’ income raised via hydrocarbons. The Washington-based IMF estimates the price slump will translate into $380bn in lost export revenues for the trade bloc. While there is little doubt the GCC six are feeling the pinch, it is to varying degrees. Kuwait, according

to the IMF, is still set to post a fiscal surplus this year, and has more than trebled its contract awards. Bahrain and Oman, however, are squeezed: the pair require breakeven barrel prices of $127 and $102.6 respectively to balance their budgets. Further complicating matters is that oil markets are showing little appetite for a rebound. “I don’t expect to see a major gain, though I think there will have to be some movement as current prices are so low,” says Robin Mills, head of consulting at Manaar Energy in Dubai, and nonresident fellow, foreign policy, at Brookings Doha Center. The impending return

of Iranian exports will not help matters, he notes. “We may well see another year of depressed prices, and only really see some kind of recovery after that.” In January, the IMF cut its growth forecast for the Middle East’s oil exporters to 3 % from the 3.9 % it projected in October. The GCC specifically will have a collective deficit of 8 % of gross domestic product (GDP), it said in May. “I think there was initial hope oil prices would bottom out in the $6070 range, and [GCC governments] wouldn’t have to curtail spending too much,” says Soussa. “That hasn’t played out. Budget deficits have

grown beyond what the Gulf states were initially expected to see, and there has been a belated realisation that something must be done to consolidate public finances, put expenditure on a more sustainable path, and to raise non-oil revenues.” It is this spectre of austerity that has given rise to jitters in the construction industry. With much of the GCC’s $194bn projects market backed by government cash – from the $32bn expansion of Dubai South, to Saudi Arabia’s railway plans - moves to trim budgets and rationalise spending on capital projects could have wider industry repercussions. “It is inevitable that spending will construction business news me October 2015 25

ANALYSIS

The housing question Of the factors set to drive the construction market in the GCC over the coming years, few are as pressing as affordable housing. The marked shortfall of properties able to cater to the region’s large and growing young population, is both a social and economic concern, particularly when set against the backdrop of regional instability. According to a recent report from real estate consultancy JLL, the Middle East and North Africa (MENA) is short some 3.5 million affordable homes. For contractors then, the scale of the opportunity is enormous. “Governments around the region have started to allocate significant financial resources to encourage more development of middle-income housing,” says Craig Plumb, head of research at JLL MENA. “But more needs to be done. We believe there is a need to rethink the existing relationship between government and the real estate development industry.” In the UAE, some 39 % of households fall into the middle-income bracket, defined by JLL as having a monthly income of between $2,700 and $8,200. In Saudi Arabia, where the bracket spans from $1,600 to $5,400, it represents 62 % of households. These workers can afford to pay annual rents of up to $19,600, or mortgages on houses worth about $215,074. It is, by any measure, a ready market. “Many markets are now experiencing an oversupply of luxury product,” the report noted. “More developers are realising the importance of targeting the middle-income sector that was previously largely ignored.” Governments also have a role to play in enabling the growth of this housing sector, by ringfencing land plots to sell at an affordable price to private developers, the report noted; on the condition that the subsequent housing is released to the market at pre-agreed rents and prices. “This form of public-private partnership incentivises the private sector to develop middle-income housing, while ensuring the end-user is protected,” the report said.

26 construction business news me October 2015

Plans for the 7.8$bn upgrade of Dubai International Airport still have a green light

come down, and certain projects will be delayed or cancelled,” says Soussa. “I think it is also inevitable that you will start to see arrears in contracts build up, as governments face greater liquidity constraints. The overall environment is, I think, becoming more difficult.” OPEC kingpin Saudi Arabia has already put a spending review into play in nine ministries, and cancelled some hydrocarbon-linked projects. The UAE, the GCC’s second-largest economy, plans to slash spending by 4.2 % this year, a Central Bank report revealed in July. The same month saw the Arab state push through a politically tricky ruling to deregulate domestic fuel prices, reflecting a more cautious fiscal stance. The regional projects market has not been immune to the scale down. In August, a report by research firm Ventures Onsite forecast a fall in the value of GCC contract awards this year to $194bn, down $2bn on 2014. For much of this year, it had been expecting awards to rise by 4.5 %, hitting $205bn by end-2015. Still, the GCC states have built resilience - and that bodes well for contractors. Both the UAE and Saudi Arabia are cushioned by huge reserves, and sizeable sovereign wealth funds – Abu Dhabi’s alone is estimated to have nearly $800bn of assets. This makes it likely that spending on key projects will sustain. In Saudi Arabia, projects such

as the $23bn Riyadh Light Rail Network, and the government-backed $67bn housing programme are of both economic and social importance. According to the IMF, the kingdom needs to add some 180,000 housing units per year for the next decade, to keep pace with population demand. “Dubai at its peak was building around 50,000 to 55,000 housing units; Saudi needs to produce three times that amount consistently over the next decade, “ says Soussa. “That is not something Saudi will shy away from for budgetary reasons. It is a political imperative, and this shortage is more material for the construction industry than anything we’ve seen for the last decade.” Equally pressing are the Gulf state’s myriad transport projects, spanning from the Makkah Mass Rail Transit to expansion of its airport capacity. “Apart from the fact that these projects help enable diversification of the economy, if Saudi is eventually going to cut subsidies on fuel, on energy, it needs to make public transport a cost-effective alternative,” adds Soussa. In Qatar, the outlook is also rosy. Construction is the tiny emirate’s fastest-growing sector, with state spending set to reach $200bn to 2030, according to Qatar’s economic blueprint, spread over a raft of infrastructure schemes. Despite speculation around the future of the

2022 World Cup, Qatar has broadly maintained investment on related large-scale infrastructure projects. On a more micro level, Qatar’s Industry of Development Planning and Statistics (MDPS) reported more than 630 building permits were issued in June, a sign of the industry’s steady growth. Dubai, once worst-hit among the GCC states by the global financial crisis, has rebounded strongly; notwithstanding still-softening property prices. The emirate has a slate of mega-projects, ranging from Dubai Holding’s $6.8bn Mall of the World, to the $7.8bn upgrade of Dubai International Airport, keeping local and regional contractors on their toes. Critically, despite an estimated $143bn overhang of debt from the last fiscal crash, there is still appetite to buy Dubai debt. This, underpinned by the city’s steady economic growth, means Dubai should have ready access to credit lines to finance its planned projects. “Despite the headwinds from low oil prices, lower regional liquidity and so on… the news is pretty favourable for Dubai,” says Soussa.

These macro conditions are percolating down to contractors. UK-based Carillion in August posted a 54 % leap in revenues within its Middle East construction services division, which spans operations in the UAE, Qatar and Oman. Profit was up by 43% a year ago. Laing O’Rourke, meanwhile, which downsized its Middle East operations dramatically in the wake of the 2008 crash, has said it is on track to more than double regional turnover this financial year, thanks to a streak of contract wins. Developers are also holding strong. State-owned Nakheel in September inked contracts worth a combined AED2.4bn with three construction firms, to build a residential and retail project in Dubai. More broadly, the first day of Cityscape Global, the region’s largest property show, saw the release of 11 real estate projects, worth upwards of $12bn. Lastly, there is the question of postsanctions Iran. Though an economic wildcard, the looming return of Tehran to the global stage opens up a sizeable investment opportunity for contractors, following three decades of isolation. Foreign firms are already jostling

to gain access to Iran’s 80m-strong population - and more broadly to a country with vast infrastructure needs; ranging from railways, to housing, to energy. Though Iran’s crude exports will worsen an existing glut - and put further downward pressure on prices – the Persian country represents a two-fold opportunity for contractors. Not only is there pent-up demand for construction within Iran’s borders; but Gulf countries – and particularly Dubai - are likely to play host to foreign firms seeking to tap this need, offering a payoff to their own economies. “For corporates wanting to reach into the Iranian economy, I think the platform they will use to do that will be Dubai,” says Soussa. “For the emirate, it means more inflow of population, it means more demand for housing and more demand for retail. Dubai’s economic model will be getting an additional and rather unexpected lifeline.” For the GCC construction industry, the future may not hold a return to the feverish boom years, but neither is there an impending bust. And, as with non-oil growth in the Gulf economies, slow and steady wins the day.

The Louvre Abu Dhabi, a project by Arabtec Construction LLC

construction business news me October 2015 27

COVER STORY

A growing market at the Gulfâ&#x20AC;&#x2122;s back door is giving companies a reason to map out a plan of action for tackling Africa

October 2015 28 construction business news me OCTOBER

rom the streets of Addis Ababa, to the offices of Nairobi and the coast of Dar Es Salaam, a young population are learning, earning and wanting more. In scenes played out across East Africa and the urban hubs of the wider continent, African cities are slowly becoming the economic powerhouses some say they have been destined to be for quite some time. Improved education, greater levels of investment and government support for long-term development projects to improve infrastructure are boosting economies and creating opportunities. This is creating an environment where investors believe there is a great potential for reward, if they are able to attract the right talent, hone their skills and develop market offerings to meet the increasing demand from many growing sectors. While some 30 out of 45 African nations have seen strong growth from the services sector, according to recent statistics from United Nations Conference on Trade and Development (UNCTAD), the sectors with the

greatest potential for construction expertise are transport, logistics and communication. The influence and strength of East African development in these sectors is starting to be felt on the UAE’s shores, thanks to its diverse infrastructure projects and the wide array of basics it needs to get them under way. It’s an influence that has emerged in a number of supply sectors, with the used machinery market being among the first to benefit. “We regularly see bidders from African countries joining our auctions in Dubai, in Europe and in the rest of the world,” says Eduard Faig, regional sales manager for Middle East, Africa and Asia subcontinent at Ritchie Bros, an auction firm. “Not just live online, but also travelling bidders that attend the auctions in person. At our last Dubai auction, we saw bidders from Egypt, Tanzania, Zambia, Uganda and several other African countries win the equipment they needed. Additionally, there are also bidders from non-African countries that source the equipment at our auctions to put it to work in Africa.”

Faig says that on average more than half of the items the company auctions off in Dubai leave the country, with many of them finding their way onto projects in Africa. And it’s a trend he says is on the rise. “Looking particularly at our Dubai auctions, over the recent years we have seen a gradual rise in bidders from African countries joining our auctions,” says Faig. “The fact that we have a mix of equipment at our auctions, including items that are fit for lesser-regulated markets, makes it an attractive place to source equipment.” For businesses that venture directly from the Gulf into East Africa the challenges of getting started are likely to look familiar, with finding the right partner and having stamina to take the long view being key. The reward for patience and perseverance may take time to emerge but it could be worth it, especially in East Africa where observers believe there is no lack of either business and investment opportunities, or access to skilled labour. It’s an opportunity that Chinese firms have notably already taken advantage of, thanks

“At our last Dubai auction, we saw bidders from Egypt, Tanzania, Zambia, Uganda and several other African countries win the equipment they needed.” –Eduard Faig

Downtown area of Dar Es Salaam, Tanzania. Image courtesy of Dereje

construction business news me October 2015 29

COVER STORY

New skyscraper being built in Nairobi, Kenya. Image courtesy of John Wollwerth

“What we’re tracking is more than $60bn worth of construction going on is in the transport area, such as highways and rail development.” - Mark Smith to their combined offer of knowledge transfer and capital infusion, which they’ve used to good effect to win ground and competitive advantages over other foreign investors. Their success can be seen in the numbers. In Deloitte’s African Construction Trends Report 2014, the firm points to an active Chinese construction effort in the East African countries, where 31% of projects under construction are being worked on by Chinese firms. China also contributes some 16% of the project funding, but owns just 2% of the final product. While China has been working at developing business on the continent for years, the UAE is a relatively new entrant. That said, it too has staked a 2% ownership of projects in the East Africa region in just its first year of appearing in Deloitte’s figures. The country is provided 2% of the funding and has a similar amount of the building work under contract (in West Africa it has provided 5% of funding for current active projects). “When we look at East Africa we 30 construction business news me October 2015

see a lot of basic infrastructure being developed,” explains Mark Smith, a partner with Deloitte and head of Infrastructure and Capital Projects East Africa for the company. “What we’re tracking is more than $60bn worth of construction going on is in the transport area, such as highways and rail development.” Across East Africa transport projects dominate the region, with a 59% share of the action, while energy and power projects are in a strong second place at 37%. The figures support the idea that the big investment is going into infrastructure development. Since 2013 the region has seen some key project milestones, including breaking ground on a Nairobi to Mombasa rail project and Tanzania refurbishing the Dar es Salaam to Issaka rail link. Of interest to experienced Gulf contractors may be what Deloitte terms the region’s ‘intensive focus’ on road development as it seeks to link its cities with highways and develop public private partnership (PPP) projects to fund the development. Over

the next 18 months projects that may come to market include the second Nyali Bridge PPP project. Elsewhere Kenya is in the process of developing an annuity finance project for a 10,000km road development and maintenance programme. In Uganda, the Nairobi Mombasa Railway is trying to raise capital amounting to $8bn for a standard gauge railway. One way into these projects may be the ability to provide creative financing options for delivery. “If you look at the massive development of infrastructure going on, the cost of the finance cannot be borne by the East African governments alone,” says Smith. “They are definitely looking for creative or alternative financing mechanisms and quite a large number of PPPs are being used to fund the more critical infrastructure needs.” One of the big projects getting under way that Smith notes could draw international attention is Lapsset, a multicountry transport corridor from Kenya into Ethiopia and through to South Sudan. The massive project will combine highway and rail developments with a pipeline and port facilities. “The first two critical projects that are being looked at in terms of kick off, using alternative project finance is the port development in Lamu as well as the oil pipeline,” says Smith. “These are two critical infrastructure projects now being looked at, specifically including how private development companies can help finance them.” While Smith acknowledges the dominance of Chinese companies in the East Africa community of countries - a dominance in part facilitated by Chinese financial institutions - he suggests there is a change on the way, driven in part by a shift in the kind of projects being worked on. As the countries in the region are moving into more sophisticated infrastructure projects, such as alternative and distributed energy, or oil and gas developments, government ministries are widening their company searches looking to bring in more expertise in increasingly complex infrastructure works.

Value of UAE non-oil exports to selected East African countries

Country

Year

Export AED

ReExport AED

ETHIOPIA

2014

406,150,856

1,780,127,206

KENYA

2014

981,530,399

1,302,073,578

TANZANIA

2014

503,484,342

1,559,778,792

UGANDA

2014

60,258,784

120,292,550

2,109,120,224

4,995,808,086

Grand Total

“A lot of the governments are now looking at alternative sources for how they want to supply and build some of these more sophisticated programmes,” says Smith. “They are looking at who they can bring in with some higher level of technologies, whether it’s in materials or alternative ways of construction, for these projects. I think there’s some real keen interest in looking at those kind of suppliers and construction contractors, who can bring in world-class expertise as it relates to these more sophisticated construction projects.” Despite the wealth of opportunity, barriers to market entry appear relatively low. Smith suggests this is thanks in part to the sheer size of the programmes being planned and executed, with a number of mega projects easily exceeding a billion dollars in value.

“When you look at the competition and who is going to be doing this work, it’s unlikely to be the local construction industry because they don’t have the experience,” says Smith. “So it clearly will be international suppliers and contractors who will be entering into the market because that’s where the level of expertise comes from. “The only matter [contractors and suppliers] have to consider is how can they do things differently with regards to integrating into not just construction or procurement strategy, but also how can they bring innovative project finance to some of these infrastructure programmes.” It’s the kind of investment environment that has been attracting increased interest from public and private sector evictees based in the UAE. The private sector in particular has been looking to invest in areas con-

sidered the strong suits of the UAE, such as port developments along the trading coasts of Tanzania, Kenya and up into the Horn of Africa. Alternative energy projects, such as wind power and geothermal are also attracting attention of UAE investors as they have an opportunity to deploy energy expertise form a supplier point of view. “I think [UAE investment] is likely to pick up,” says Smith. “UAE firms have tested the market and are finding some success: the trend will continue. If you look at the future for these mega infrastructure projects in East Africa they have a fairly long tail, with 10 to 15 year development cycles. For UAE firms that’s the kind of market they are going to pick up and accelerate with in terms of being a competitive player in the market place.” Kenya is the primary target for construction business news me October 2015 31

COVER STORY

Ashley Roberts, event director at dmg events Middle East and Asia

many organisations looking to get a foothold in East Africa, with the nation’s vibrant economy and stable systems making it a strong gateway to the region for new arrivals. It is also home to the most projects in East Africa, a factor that contributed to the launch of The Big 5 Construct East Africa, which will run for the first time in December next year. “As East African countries continue to witness rapid economic growth from increased revenues as a result of the evolving market, there is a stronger demand for infrastructure development and suppliers for landmark construction projects,” explains Ashley Roberts, event director for The Big 5 Construct East Africa at dmg events Middle East and Asia. “There will be a wider market gap for building products and construction solutions that address respective project requirements. As sustainability is a vital factor for consumers in the region, national policies and government support will cultivate the need for modern eco-friendly construction materials to meet unique demands, which will in turn draw new and in32 construction business news me October 2015

“As sustainability is a vital factor for consumers in the region, national policies and government support will cultivate the need for modern eco-friendly construction materials to meet unique demands, which will in turn draw new and innovative suppliers to the region.” –Andrew Jeffery novative suppliers to the region.” Roberts notes that there is work to do in getting the message across to the construction supply market about the potential of opportunities in East Africa. He suggests some companies do not yet have a clear understand-

ing of the wide range of opportunities and the immense potential of countries within East Africa. “They also have incorrect notions with regards to the stability of the region’s economies and political landscape,” he says. “However, the countries within this region feature very resilient economies as well as effective policy reforms. In addition the international community is becoming more enlightened with regards to the wealth of business opportunities that the region offers. Many countries are allocating funds in order to actively invest and penetrate in these respective markets.” As awareness spreads more competition may gradually enter the East African market, but as it stands companies with technical expertise and project know-how are in demand. As East African countries continue to record a middle class growth rate stronger than other emerging markets their increased purchasing power will continue to drive demand for more of everything. There’s an opportunity waiting at the Gulf’s back door for those companies able to provide it.

COMMENT

Ending disputes

n the Middle East most disputes emanate from a failure to properly administer the contract that the parties entered into. There can be many causes of this. Three common causes are the contract administrator does not wish to award the contractor an extension to the time for completion when one is in fact due for fear that this may jeopardise its relationship with the employer. The contractor fails to comply with the relevant notice provisions in the contract. And, lastly, parties do not fully understand their respective design obligations. Transport and social infrastructure are especially prone to dispute due to the nature and complexity of the works involved. The works often span great distances where there are varied and challenging land conditions. The land conditions in one area of the works can involve existing major underground utilities that require relocation. The land conditions may be such that the works are undertaken within the built environment where great care has to be taken because surrounding buildings are occupied and roads operational. These circumstances often cause delay and additional cost to contractors due to third party requirements. Transport and social infrastructure projects often involve state of the art technology that is not procured from the country where the project is located. The shipping and installation of these materials is a cause of delay because of the procurement time and the international specialists required to install them not being familiar with the project country conditions. Delays due to land conditions and procurement often prompt contractors to claim from employers. Then the

Edward McCluskey, partner at Arcadis, analyses the common construction disputes in the region and discusses how to handle them cycle again begins with the contract not being administered properly which in turn causes disputes. There are of course many other causes of dispute but these could be said to be the most common.

Communication, a possible solutions There is no panacea that resolves all disputes but quite often a very helpful remedy is clear, honest and effective communication. This communication should take many forms. The first is a clearly written contract where the obligations and rights of each party are easily discernable. The second is where the parties agree to communicate, be that written or orally, in a respectful courteous manner to avoid inflammatory language. And, lastly to openly and promptly communicate with one another to find an amicable solution when problems arise. Through effective and prompt communication the issues with contract administration can be greatly mitigated.

Dealing with the gap Due to the fantastic and exciting construction industry in the Middle East where the projects are state of the art and pushing the boundaries of imagination it is inevitable that challenges will arise. The gap in the market is to practice effective dispute avoidance. This can be through the use of Arcadis

professionals where effective communication is instilled into the project and or where there is an effective dispute resolution procedure in place that preserves the relationship of the parties to the contract. The Middle East has some of the best construction litigation lawyers in the world. By having a litigation lawyer involved one may suggest that a dispute has already crystalised. Perhaps what is required is more properly trained dispute avoidance practitioners be that lawyers or construction professionals such as architects, engineers or surveyors. These practitioners can be involved at any stage of the project from drafting of the respective contracts or throughout the construction phase and beyond to assist the parties in avoiding painful and costly formal dispute resolution proceedings. As Benjamin Franklin said, â&#x20AC;&#x153;an ounce of prevention is worth a pound of cureâ&#x20AC;?.

Edward McCluskey is head of alternative dispute resolution at Arcadis Middle East. He is a chartered arbitrator, chartered quantity surveyor, CEDR and RICS accredited mediator. Edward is an experienced dispute resolution practitioner with more than 22 yearsâ&#x20AC;&#x2122; experience. He is also the current chair of the RICS ADR Working Group in the UAE. construction business news me October 2015 33

COUNTRY FOCUS

Laying foundations Qatar’s construction sector has seen strong and buoyant growth since the announcement of the 2022 FIFA World Cup, but look beyond the stadiums and the industry is alive with record breaking infrastructure projects that will pave the way for the state’s next wave of growth

his December marks five years since the award of the 2022 FIFA World Cup to Qatar – a decision which has been mired in controversy, but one which has brought about an untold level of economic stability and opportunity to a Gulf state that was previously happy to live on its hydrocarbons revenue. In the tiny Gulf state, which a mere 2 million people call home, nearly $350bn of projects are currently in the planning or construction phase; each designed to contribute to creating an urban playground with the ability to at-

34 construction business news me October 2015

tract a skilled expatriate workforce and steady influx of tourists. From the necessary requirements to complete infrastructure projects such as Doha Metro and Doha International Airport, to the pressing need to secure water supplies through Ashghal’s multicontract, multi billion dollar roads and drainage network, to show stopping stadia required for the 2022 World Cup, Qatar is a hub of construction activity akin to the Dubai of a decade ago. According to Project Qatar organisers, IQPC, some of the major initiatives in the pipeline include a $7bn deep

water port and a $1bn transportation corridor in the capital city Doha. New roads, stadiums and facilities will account for a further $200bn in spending over the coming decade, with key projects including a metro system, the 433,000 square metre Doha Festival City mall and the Sharq Crossing, aka Doha Bay crossing, worth $5bn. While nobody is claiming almost the entire world’s stock of tower cranes currently reside in Doha, anybody with an ear anywhere near the ground realises the significance of what is unfolding in the country.

Fast growth In an analysis of the entire economy – of which hydrocarbons contribute over 50% to GDP – Qatar’s construction sector remains the fastest growing of all economic areas, with the government pledging $200bn of investment. According to analysis from Oxford Business Group contractors specialising in projects related to transport, retail, real estate, tourism and education, are poised to benefit first. These projects alone could contribute up to $70bn to the total project pipeline volume of $350bn.

According to a report by BMI Research, Qatar’s construction sector is expected to grow by an average of 10% a year until 2025 – making it the strongest in the GCC and going some way to show that the industry is far from a one trick pony. Transport Last month, delegates at MEED’s Qatar Transport Forum were informed that more than $40bn worth of planned transport projects are currently in the pipeline. These include the expansion of Ha-

mad Port, the Doha Metro and longdistance passenger and freight network, an expressway programme and the $8bn expansion of Hamad International Airport (HIA), including an expansion of the main terminal building and concourse D and E. Also revealed for the first time were plans for two additional container terminals at Hamad Port that would increase the $7.3bn project’s handling capacity to 6 million TEUs by 2020. The first phase of the megaproject is due to open at the end of 2016. Transport Minister Jassim Seif Ahmed construction business news me October 2015 35

COUNTRY FOCUS Muscat, capital of Oman

al-Sulaiti said in January 2014 that the plan to merge the first and second phases of the $7.5bn project will lead to third phase completion by 2020, a decade ahead of its original target date of 2030. The first phase of the new port is due to be completed in 2016. Qatar Railâ&#x20AC;&#x2122;s Chief of Service Delivery Andrew Tailor updated the Forum on Qatarâ&#x20AC;&#x2122;s $20bn-plus integrated transport plan. A world record 21 tunnel boring machines are being used on the Doha Metro project, which so far has completed almost 50km of tunnels. A total of 26,000 workers are working on the project, equating to more than 78 million man hours worked as of end of August. Work on the Lusail tram scheme is even more advanced, with stations completed, while the tender for the first phase design and build of the long-distance freight and rail network will be issued to contractors early next year. On the roads side, Eng. Nasser al-

Kuwari, Manager of Highway Projects department at Ashghal, presented an overview of the QR40bn ($10.8bn) expressway programme. The massive project, which involves 1,000km of new or upgraded roads, 240 ma-

jor interchanges and 360 bridges, has already seen 43 major contracts awarded. A total of 15 contracts are either in the market or are being prepared, while a further 23 are in the planning stage.

Major Buildings and Infrastructure Projects in Qatar - Ongoing and Planned No. Project Name

Client

Est. Value in US$ Mn

Airport City Project

New Doha International Airport City

10000

New Doha Port

New Port Project Steering Committee

7000

Msheireb Downtown Doha

Msheireb Properties

5500

Sharq Crossing

Ministry of Municipality & Urban Planning, Qatar / Public Works Authority (Ashghal)

5000

Valley City

SAK Holding Group

4800

Doha Metro - Gold Line

Qatar Railways Development Company

4400

Long Distance Passenger and Freight Rail Network - Phase 1

Qatar Railways Development Company

3500

Energy City Project - Phase 1

Energy City

3000

The Inner Doha Resewerage Implementation Strategy (IDRIS)

Public Works Authority (Ashghal)

2500

Doha Metro - Red Line North

Qatar Railways Development Company

2300

Doha Metro - Green Line

Qatar Railways Development Company

2200

Doha Metro - Red Line South

Qatar Railways Development Company

2200

36 construction business news me October 2015

Construction Industry Value, QARbn and Real Growth, % Chg y-o-y 200 175 150 125 100 75 50 25

Construction industry value QARbn (LHS)

The bankroll However, the phenomenal growth has contributed towards a disparity between need and cost. In the lead up to The Big 5, 2015, Mohamed Sheikh Al-Souk, deputy general manager, Construction Development Contracting and Trading, has come forward to highlight the difficulty companies face in generating financial support from Qatari banks due to “ever more restrictive” regulations. It’s a problem which does not exist in isolation. He has been quoted by dmg events, as saying: “Since there is so much demand and the infrastructure here has not quite caught up yet, there are always very high costs associated with the growth of any company such as high rent and consequently high wages. “It is extremely difficult to obtain banking services from local banks because they have raised their requirements in such a way that it is now more difficult than ever. This directly affects the progress of work because lack of banking facilities ‘negatively’ impacted on the cash flow, implying lesser ability to maintain the momen-

f 24 20

f 23 20

22 20

21 20

f 20

19f 20

18f 20

17f 20

16f 20

15f 20

200 175 150 125 100 75 50 25 0

Construction industry value Real Growth, % y-o-y (RHS)

Total Value of Qatar Construction Projects Sector

Value in US$ Million

Buildings

136484

Infrastructure

103426

Energy

40294

Total

280204

“The scale of the construction boom in Qatar has brought significant difficulties along with a host of fresh opportunities” tum of projects through timely payments and material sourcing. The scale of the construction boom in Qatar has brought significant difficulties along with a host of fresh opportunities.” Mark Rudman, former regional director of Faithful+Gould, echoed Al-Souk’s concerns: “Delayed payment is all too common and it affects the whole of the supply chain, it is almost taken for granted that the contract terms will be

ignored or only used when convenient.” Adding to such concerns, the International Quality and Productivity Centre (IQPC) calls inflation a “serious problem”. While steep rises in construction material prices has long been anticipated, in June Reuters quantified the potential hike with estimates in the range of 15 to 20% from 2018. “The pinch point will likely be in construction business news me October 2015 37

COUNTRY FOCUS

2017-19 when the construction work peaks, but the government can take measures to mitigate that,” said Nick Smith, partner at engineering consultants Arcadis in Qatar, was quoted as saying. “This will include early supply chain engagement, standardisation of products and direct procurement of certain items. Qatar is already pursuing some of these initiatives.” According to the Qatar Inflation Report by EC Harris, If the forecasts for the scale of construction in Qatar are correct, the construction materials market could be $6 billion to $9 billion over the next two to three years. The report stated: “Whilst some major projects may need to be re-scoped or deferred until after the tournament, 38 construction business news me October 2015

“Delayed payment is all too common and it affects the whole of the supply chain, it is almost taken for granted that the contract terms will be ignored or only used when convenient” - Mark Rudman

a wider re-timing exercise will need to take place in order to shift as much construction away from the anticipated peak construction period and into the post-tournament period. This activity would require programme planning co-ordination between all the key public and private developers and a centralisation of decision making related to programme interdependencies and timings.” Further issues remain with the availability of work visas, which is delaying some project and leading to additional costs. However the overall sentiment remains positive and, with the combination of a strong project pipeline, boundless ambition and solid sovereign wealth, the tiny Gulf state is still set for very big things.

construction business news me October 2015 39

Cityscape Global

REAL ESTATE – CITYSCAPE GLOBAL 2015

40 construction business news me October 2015

Winners of Cityscape Awards for Emerging Markets 2015 MIXED USE PROJECT AWARD (BUILT) Project: One Shenzhen Bay in Shenzhen, China Developer: ParkLand Real Estate Development Co., Ltd Architect: KPF with AUBE & CCDI

COMMUNITY, CULTURE & TOURISM PROJECT AWARD (FUTURE) Project: National Museum of Qatar in Doha, Qatar Developer: Qatar Museums Architect: Ateliers Jean Nouvel

MIXED USE PROJECT AWARD (FUTURE) Project: Heartland 66 in Wuhan, China Developer: Hang Lung Properties Ltd Architect: Aedas

RESIDENTIAL PROJECT AWARD (BUILT) Project: Qent İstinye in Istanbul, Turkey Developer: Dilek Gayrimenkul Architect: Melkan Gürsel & Murat Tabanlioglu

COMMERCIAL PROJECT AWARD (BUILT) Project: The Forum in Hong Kong Developer: Hongkong Land Architect: Aedas COMMERCIAL PROJECT AWARD (FUTURE) Project: Main Office Building, Macau Traditional Chinese Medicine Science and Tech Park in Zhuhai, China Developer: Guangdong-Macau Traditional Chinese Medicine Technology Industrial Park Development Co., Ltd Architect: Aedas LEISURE & HOSPITALITY PROJECT AWARD (BUILT) Project: Lusail Sports Arena in Doha, Qatar Developer: Ministry of Youth and Sport Architect: Dar Al Handasa LEISURE & HOSPITALITY PROJECT AWARD (FUTURE) Project: Novotel Linkong 16-1 in Shanghai, China Developer: Zhanhong Real Estate Development Ltd Architect: Aedas COMMUNITY, CULTURE & TOURISM PROJECT AWARD (BUILT) Project: Ko Shan Theatre New Wing in Hong Kong Developer: Leisure and Cultural Services Department, HKSARG Architect: Ronald Lu & Partners

RESIDENTIAL PROJECT AWARD (FUTURE) Project: The Piers in Muscat, Oman Developer: The Wave, Muscat Architect: Kettle Collective RETAIL PROJECT AWARD (BUILT) Project: Welcome Pavilion and Cascade Dining in Abu Dhabi, United Arab Emirates Developer: Miral Architect: RTKL UK Ltd. (Dubai Branch) RETAIL PROJECT AWARD (FUTURE) Project: Qingdao Jinmao Harbour Shopping Center in Qingdao, China Developer: Franshion Properties (China) Limited Architect: Aedas SUSTAINABILITY PROJECT AWARD (BUILT) Project: Ko Shan Theatre New Wing in Hong Kong Developer: Leisure and Cultural Services Department, HKSARG Architect: Ronald Lu & Partners

The Forum, Hong Kong

Medium Pyramid impresses Deputy Ruler of Dubai After the inauguration of Cityscape Global 2015, H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, particularly praised the design and layout of the Falconcity of Wonders’ Medium Pyramid during his VIP tour of the event. H.E. Salem Al Moosa, chair and general manager of Falconcity of Wonders, said: “It is because of our leaders’ support that we are able to continue our growth. We are always grateful to Sheikh Mohammed bin Rashid Al

Maktoum’s continued and strategic vision of making Dubai as a global tourist destination and the region’s main business hub.” The recently launched pyramid will be a 20-storey structure featuring approximately 2,000 luxurious service hotel apartments comprising studios, one and two bedrooms. Covering an area of over 41 million sq.ft, Falconcity of Wonders features spacious apartments, shopping malls, hotels, fine dining restaurants, health

clubs, spas, nurseries, schools and parks. Shaped like a falcon to symbolise UAE’s heritage, the area will attract real estate investment opportunities that arise from commercial and recreational facilities. H.E. Almoosa said: “FCW’s participation in this year’s edition of Cityscape Global in Dubai was highly successfully. We received an overwhelming number of visitors, most of whom were investors who expressed high interest in the design and layout of our mega-project.”

Massimiliano Ferrari, managing director of Brand Lifestyle at Bugatti, at the Damac stand in Cityscape Global 2015

Damac launches the world’s first Bugatti-styled homes Damac launched the world’s first Bugatti -styled homes during the Cityscape Global exhibition in Dubai this year. The exclusive limited edition collection called Ettore 971 Bugatti Styled Villas will be situated in the 55 million sq.ft Akoya Oxygen master development, overlooking the Tiger Woods designed Trump World Golf Club. Ettore 971 is named after Ettore Bugat-

ti the founder of the renowned French Luxury super sports car brand Bugatti and ‘971’ signifying the international code for the UAE. The seven bedroom villas are conceptualised by the designers of the world’s fastest street-legal production car, the iconic 1,200hp Bugatti Veyron and stylishly reflect its distinctive curved front. Prices will be in the range of AED36m.

Ziad El Chaar, managing director of Damac Properties said: “We know that many of our loyal customers are huge fans of the Bugatti super sports car brand and the opportunity to live in the world’s first villas styled in Bugatti’s design language featuring key codes of the brand’s DNA is a unique opportunity to experience this fantastic brand in a whole new way.” construction business news me October 2015 41

REAL ESTATE – CITYSCAPE GLOBAL 2015

Nakheel to transform a section of the Palm

Nakheel announced its intention to transform the entire trunk of Palm Jumeirah into a walkable beach, park, retail and café complex. The Palm Promenade will stretch 1.5km along the island’s trunk, with new walkways and road crossings connecting the area’s 30 apartment buildings with Al Ittihad Park, Palm West Beach and the growing number of retail, dining and entertainment facilities on The Palm. Unveiling the project at Cityscape Global Dubai, Nakheel chairperson Ali Rashid Lootah said: “The Palm Promenade is all about connectivity, walkability and accessibility, and yet another example of our continued delivery of new, innovative projects at the worldfamous Palm Jumeirah.” Under the plans for the project, Nakheel will connect all elements of the Palm Jumeirah trunk with one another. It also includes upgrades to the design of Palm West Beach, Nakheel’s new park, dining and beach club facility for the island. New features include two children’s fountains, retail facilities and parking for 700 vehicles. The Palm Promenade joins several other new Nakheel projects, including Nakheel Mall, The Palm Tower, The Palm Gateway and The Pointe, coming to Palm Jumeirah. During the event, the developer also unveiled Jebel Ali Gardens, its new community providing accommodation for more than 40,000 people. The new master developed project will comprise nearly 10,000 apartments in 42 buildings, set among landscaped gardens with pools and sports facilities. Apartments range from one to three bedrooms, and each building will also have ground floor retail space. 42 construction business news me October 2015

Sharjah Oasis launches environmentally friendly city Sharjah Oasis Real Estate Development officially launched its most iconic project, Sharjah Waterfront City, at Cityscape Global 2015. The new project is set to build its own landscape creating a luxurious and environmental friendly city spread across 36km of coastline with a total area of 60 million sq.ft. Hayssam El Masri, president of the Sharjah Oasis Real Estate Development said: “We have launched Sharjah Waterfront City keeping in line with Sharjah’s development plans to attract 10 million visitors to the emirate by 2021. These robust plans will increase demand for residential and commercial units as well as hotels, especially in prime locations that offer all modern facilities.” Sheikh Abdullah Shkara, chairperson of Al Hanoo Real Estate Co. added: “We have invested a lot in this project

and we are delighted to see Sharjah Oasis Real Estate Development doing a tremendous job in the construction of Sharjah Waterfront City. We believe this project will be the heartbeat of the city’s tourism 2021 vision.” Dusit and Shaza in Sharjah Waterfront City are the first two hotels to sign the agreement with Sharjah Waterfront City. The hotels are expected to start construction by the last quarter of 2016 and expected to open to public in 2019.

Meydan showcases latest projects

Meydan City Corporation showcased two of its major real estate developments in an interactive exhibition stand at Cityscape Global. The star attraction on the 792 square metre stand is Meydan One, recently launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, at a VIP event. A 3,671,000 square metre leisure, residential and hospitality destination, it is set to become Dubai’s prime destination when the first phase opens in 2020. The project is set to break at least seven world records featuring the 711m tall

Dubai One Tower, Meydan One Mall, a Civic Plaza with dancing water features, a 4km canal and 100 berth marina. Other projects showcased included the Dubai Water Canal development, a joint venture project with the Roads and Transport Authority, Meydan City Corporation and Meraas. The Canal, which runs 2.9km connecting Business Bay to the Arabian Gulf, will include the development of the Crystal Lagoons in Safa Park as well as 8.1km of waterfront. With 8.2 million sq.ft of open space, the Dubai Water Canal project will feature a 5.7km boardwalk, 1.1km natural beach and pedestrian connectivity between Safa Park and Jumeirah Beach Park. Meydan chair His Excellency Saeed Humaid Al Tayer said: “The response to the launch of Meydan One has been inspiring, making our presence at Cityscape Global even more important as we continue to communicate the sheer scale of the development to investors and the wider real estate market.”

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construction business news me October 2015 43

REAL ESTATE

Dubai has over three million square metres of GLA. Image courtesy of David Steele

How important is the growth in new mall developments to draw in tourism from the GCC and internationally to Dubai? Matthew Dadd writes

Retail valued D

ubai has witnessed a seismic shift since 2004 in the total gross leasable area (GLA) in retail shopping opportunity. With over three million square metres currently available from super regional to community retail, the variety for residents and tourists alike is formidable. The strategic positioning of the GCC’s malls makes them more than a place to simply shop; they are now places to meet and be entertained for the whole family. It is not just attractions for the hot summer months, but also for the pleasant winter climate. New retail offerings such as City Walk and The Beach offer outdoor retail destinations which are predominately food and beverage (F&B) focussed. Other developing projects such as d3 by Tecom, will be a new business park that will offer a range of unique F&B and retail offerings within the first phase of the design district master plan.

44 construction business news me October 2015

Latest trends in retail Currently in Dubai there is a shift towards community retail to serve local residents as everyday malls. City Centre in Me’aisem, is the latest $75m community mall to be released to the market by Majid Al Futtaim. This centre provides 55 shops and is anchored by a Carrefour Supermarket and Magic Planet. The purpose of a 24,000 square metre community mall is to provide the essential amenities such as a supermarket, hairdresser, coffee stores, pharmacy and banks. The locality within residential communities and ease of parking is a key driver for consumers choosing a community mall over a regional or super regional mall. However, the larger malls are positioning themselves in a different market and improving their access, such as links to the metro and additional parking. Mall of the Emirates has just added an additional 1,300 car parking spaces this summer which again will hope to draw more consumers to choose the mall due to its excellent

location, parking and extended range of shops. There are currently press statements released by the larger developers for an additional 600,000 sqm of GLA in Dubai over the next couple of years, with additional projects ‘on hold’ there is significant supply which could be delivered to the market. However, we do not expect all of these to be completed or delivered on schedule due to the size and complexity of the projects, which will allow the market to absorb GLA and older malls to modify their position and shopping experience. In a city which is renowned worldwide for launching mega projects, Dubai has not seen a significant super regional mall delivered in over five years. However, upcoming projects such as Meydan One and Mall of the World (gross development value of c. $6.8bn) – which will be a mixed-use community with the world’s longest indoor ski slope, a 25,000 square metre indoor sports facility, a 100 berth

Real Estate

marina, city beach and a civic plaza – if delivered could help drive footfall into Dubai’s retail tourism sector. Tourism and retail With Dubai International Airport overtaking London Heathrow as the world’s busiest airport with 70 million passengers a year and the increase in the hotel keys, the continued drive for expanding the tourism sector is key. The retail offering will adapt with the market as well, as new international markets are opened up with Emirates and other airline carriers, we will see new tourist flows. Currently the top three international countries for tourists include Saudi Arabia, India and the United Kingdom. With global financial markets remaining precarious, the Russian economy under pressure and the Chinese economy faltering, we may see a continued slow down or reduction in consumers purchasing luxury goods. However, the world never remains the same and with the forthcoming sanctions being lifted on Iran, Dubai is poised to witness a large new consumer market closer to home. Dubai has always positioned itself as a luxury destination, this balance is now changing with new initiatives to increase the number of hotel rooms in the mid-market and budget sector which will have a consequential shift in consumer retail spend and retail habits. This drive into a new market sector has been encouraged by incentives by the Dubai authorities and therefore early traction is expected. As new malls are developed we expect to see additional GLA being focussed on this market segment to capitalise on mall footfall and spend. New activities and attractions are being created in Dubai’s malls to enhance the length of stay of its consumers as well as their tenant mix as they adapt to their target audience. Dubai is positioned as a city beach destination, but currently has a relatively low length of hotel nights stayed, compared to global cities such as London and New York, which will impact spend per head in the city. By having more affordable hotels in

Matthew Dadd, partner at Knight Frank

the city this can only but provide this opportunity and support the retail market’s future growth. Obstacles to market growth The GCC retail market is developing rapidly with new mall projects under construction in every country, this development of new retail GLA will affect the consumer spend in Dubai. Saudi Arabia is one of the three biggest tourism markets for Dubai and with new malls and expansion projects underway, we expect this to affect retail spend in Dubai, although may not affect tourist numbers coming to Dubai as a weekend destination. This coupled with Dubai’s higher luxury good prices compared with cities such as London and New York, which are frequently visited by the resident population to purchase expensive one off luxury items, Dubai must ensure its positions itself to attract high spend per capita as well as footfall. This may be a short

term concern as exchange rate fluctuations with the Euro, which has allowed some retailers to purchase new product lines at ‘reduced prices’ and help Dubai remain more competitive globally and attract retail consumers. Dubai’s retail sector is dependent not only on the resident population, but also foreign visitors to support the existing GLA or planned projects and therefore must keep adapting and positioning itself to attract people to live, visit and enjoy the array of retail opportunities the city has to offer.

Matthew Dadd is a partner at Knight Frank Abu Dhabi. He is a member of the Royal Institution of Chartered Surveyors (MRICS) and has over six years’ experience in the Middle Eastern commercial real estate market, specialising in office, landlord, tenant and retail advisory and consulting. construction business news me October 2015 45

TECHNOLOGY

Talking

Collaboration In the second part of a three-part part series on Construction Collaboration Technologies, Dr Asif Sharif, regional director of Conject explains that not all project collaboration solutions are built the same

o define what we mean by ‘collaboration solutions’ is a good place to start. Terms such as project collaboration, document management and project controls are often interchangeable, having different meanings to different parties. The KPMG Global Construction Survey 2015 states that the use of Project Management Information Systems (PMIS) are not yet ubiquitous (with only 50% of global projects currently being supported by software), and goes on to define PMIS as: “Software to improve project planning, scheduling, monitoring and controlling, in order to raise the quality of decisionmaking in each phase of the project life cycle. It enables engineers and project managers to communicate project status swiftly and accurately with functional departments, while also keeping senior management up to speed on all the projects in the portfolio.” Document Management is a core component and very much a constant feature and would typically support projects by enabling easy storage and retrieval of the following types of documentation and data:• Pre-contract documents; specifications, tenders, bills of quantities etc. • Change processes (Technical Queries, Request for Information, Change Requests etc) • The contract itself • Schedule of works – detailing the project timeline and current progress • Drawings with integrated viewing tools to support all common file formats

46 construction business news me October 2015

• Communications – Submittals, Transmittals, Project Emails, meeting minutes • With the use of BIM gaining in popularity, solutions should also provide a Common Data Environment (CDE) to enable effective collaboration between design and construction delivery teams. • Financial information – budgets, purchase orders, invoices • Instructions, amendments to contracts and written approvals • Management and contract performance reports The other key characteristic of collaboration solutions is how it is delivered and accessed by the user base. Solutions which are hosted internally are designed to help internal teams and departments collaborate amongst each another and provide a central repository of information within a company structure. In contrast, many collaborations solutions are hosted via the “cloud” and the software (is delivered) as a service to support external project teams during the lifecycle of construction projects. This latter category of collaboration solutions are particularly well suited to foster, support and encourage inter-working between project participants form various companies in the supply chain. During a recent seminar on claims and disputes run by leading Middle Law firm Al Tamimi and Co., the importance of externally hosted, web based, ‘electronic document manage-

ment systems’ was highlighted as being key to mitigating risks on projects. Whether the organisation is a contractor or client, recording, organising and having the ability to re-produce information has strategic importance in supporting or refuting claims. You could even go as far as to say that organisations should think about setting out how they manage information at the start of a project, almost as if they are already in litigation. This would ensure effective dispute resolution measures are ready and in place. What are the different 'types' of software systems used to support projects? First tier; are systems which provide a basic way of enabling simple storage and sharing of documents and information, but offer very little in the way of supporting collaborative working. Often adopted to replace email as a way of managing and disseminating large files, these systems tend not to have inbuilt messaging and process management features, and are often used by single entities needing a ‘quick fix’ in making content accessible to internal stakeholders. Second tier; those which offer more 'State of the Art' functionality in enabling logical organisation and structuring of information, version control, multi-organisation access, and crucially provide advance search features such as OCR capability. These systems are developed to allow multiple stakeholders to have access to important data,

(depending on roles and rights), as and when required and support varying degrees of collaborative working. From Document Management to Business Management… Third tier; providing an even greater level of sophistication, moving document management functionality into the area of project controls. Project controls systems are designed to provide a complete framework that ‘holistically’ brings together and manages documents, communication, processes, cost and time. The real differentiator here is better risk management, which comes through having a better understanding of the project commercials, namely, money spent and work done compared to budget and work forecast. Collaborating with BIM With many governments now mandating the use of BIM on projects, the term Common Data Environment (CDE) has gained prominence. In essence this emphasises the requirement for projects to ensure that robust collaboration solutions (some second and particularly third tier) are being implemented on projects to ensure that model data can be accurately stored within the CDE, version controlled, easily retrieved and viewed by multiple parties, whilst still ensuring that there is strict control on the authoring and amending of the models themselves. Typically, second tier collaboration solutions would enable the model files to be structures, stored, version controlled and viewed. Third tier solutions go a step further by enabling commenting, reviewing and approvals of such files to be undertaken in a fully audited collaborative environment between defined parties involved in the design, construction and maintenance process. The extent to which information should be recorded and stored is a very pertinent question. Take a single area such as email for example, in large teams a question could be asked as to whether ALL formal, project email communications should be recorded. Within the realms of a project, it's very much an ‘all or nothing’ approach to the management of information.

All parties will generate information (whether it's simple communication, RFIs, design changes/variation). Authorised parties (typically client, engineer, PMs) will review and approve information. Emailing outside of the ‘project space’ is to be discouraged, as getting access to email accounts - in the event that a key member of project team has moved on - is extremely challenging. The short answer of course is - YES. The very mechanics of these systems, which allow legal teams to easily sift through all the information to get to that important 5% of relevant information. A local case where a contractor's document management system was in fact far too basic in its architecture and ability to support forensic analysis of data (no OCR capability). The effect of this meant that is was virtually impossible to re-produce important information, when needed. How about access rights to information? Within the UK forms of contract such as NEC3 and JCT promote open and collaborative working between projects teams. By virtue of this, the systems used in supporting these projects provide an environment where projectwide collaborative working encourages transparency, auditability and accountability benefitting both clients and delivery teams. The converse of this is a tendency for teams to revert to more traditional approached to client and supplier relationships which are based on clients defining requirements with the aid of consultants and then tendering projects to usually the most experienced lowest bidder to construct the project. Typically there are no previous relationships between the teams or real understanding of the clients and projects requirements. As a result there is little proactive anticipation and management of changes and any deviation from the defined scope of works will result typically in cost and time escalations. Therefore the question that should be asked is our industry ready for change and can we support collaborative working going forward and most if

not all projects rather than the few high profile ones. If the system is very ‘closed’ in its design, then perhaps it’s more of case that the system is no better than a repository of information and the traditional paper process, rather than a solution that enhances collaborative practices. This is a journey for project teams to take, but it’s one which they will have to take sooner or later in order to stay in the market and retain or grow their market share. Investing in Collaboration Solutions A pragmatic approach is needed prior to evaluating and investing in any form of software, and one where a cost-v-benefit analysis is evident. So in other-words, ensuring that organisations don't over-shoot on the fundamental needs of the project, but at the same time, making sure that you do get value for money. Suppliers also need to be flexible in their licencing and commercial models, and due to the nature of projects, allow for ramping up and scaling down in line the profile of the project. Aside from the functionality of the software, three very important questions around the physical characteristics inherent with software-as-a-service should be carefully considered: • Can vendors demonstrate a first class hosting environment, with mirrored backups to an alternative data-centre, ensuring your service continues in the event of total system failure? • Does the system lend itself to be able to provide a full, detailed and transparent audit trail of all transactions performed by the project teams? • What happens to your data at the end of the project? Will your supplier provide you (or your client) with an archive of all the project data as part of their service? On those final three points - my next article will specifically address data management, asking 1] How safe is your data? And as and when projects come to an end… 2] Who owns the data? construction business news me October 2015 47

PROJECT update

A true

landmark

Exhibiting at Cityscape for the first time, JLT developer DMCC welcomed appointed architects and VIP guests Adrian Smith and Gordon Gill of AS+GG to unveil to the world what has come to be described as a “true landmark”, the Burj 2020 District

Number crunch: Dubai’s JLT

200ha

area, encompassing

67 towers,

which are home to

11,000

licenced companies

85,000 people

living and working in the area

48 construction business news me October 2015

t’s the skyscraper with its own Twitter account, and is potentially the most anticipated project since the announcement of Kingdom Tower. Nobody can verify how tall it will be and few can really define how it will be used, but it’s the project that is tipped to define the next five years in global architecture and it will be constructed in Dubai’s JLT. Burj2020 and its surrounding district, the mastermind of Jumeirah Lakes Towers’ developer DMCC, won’t just be Dubai or the UAE’s latest landmark, it will be the pinnacle of what is described as an urban destination delivering “the ideal balance of world-class commercial, retail, hospitality and residential space at the gateway to south Dubai”. Officially launching the project during its first ever participation at Cityscape Global, DMCC executive chairperson, Ahmed Bin Sulayem, accompanied by CEO Gautam Sashittal and world-renowned tall tower architects, Adrian Smith and Gordon Gill (AS+GG), said: “Dubai’s commitment to expanding economic growth and its strong track record in attracting global businesses is continuously driving DMCC to deliver efficient premium marketplaces for the leading businesses of today and tomorrow. “The Burj2020 District is central to this strategy and will deliver the ideal balance of world-class commercial, retail, hospitality and residential space, all set within a thriving urban landscape at Dubai’s southern gateway. Burj2020, the district’s landmark vertical destination will join the elite group of the world’s most unique super tall commercial towers and complement the Dubai skyline with its striking design by Adrian Smith and Gordon Gill.” The landmark commercial tower is set to deliver new levels of working environment efficiency and contiguous, flexible floor plates that address modern-day business demands. Inspired by faceted gemstones, the design is rooted in “the principles of perpetual value, enduring strength and everlasting beauty,” according to the architects, but it’s also about something more. Channelling a futuristic design in its intended use of glass, steel and natural lighting, the project will balance science and art and it is expected the tower will also become a bea-

con of sustainability, with current ambitions to attain the highest LEED rating. Explaining how his career has been inspired by nature, Gordon Gill says: “One of the largest influences to the contextual approach I have taken in my work occurred when we started talking about the environment from an energy perspective, where we said ok this place has a unique foundation; the earth the geography of a place the impact of the soil has temperature differentials, you can mine that difference. Take for example the wind; some places have none, some have a lot and you can use that energy to generate power. Solar; some places have a lot of sun and that can be utilised.” The era of the megatall The last decade has seen a transformation in the skyline of the world’s cities, and no less than a revolution in the way new buildings are designed and developed. Partly attributable to the high demand for land, and partly attributable to the need to re-create the idea of community for the modern world, today the trend is irreversible. According to data from the Council of Tall Buildings and Urban Habitats (CTBUH), at the start of the 21st century, Malaysia’s Petronas Towers were the world’s tallest, at 452m. In 2004 that title went to the Taipei 101, which stands at 508m then, six years later the title was awarded to Burj Khalifa, which at 828m has held the record for five years and mostly likely will until Saudi Arabia’s Kingdom Tower opens in 2019. Incidentally, the world’s tallest LEED certified building is Taipei 101, following a ceremony in 2011. Using the data to predict how future trends will develop, CTBUH expects that by 2020 the world’s tallest building will have more than doubled. So what of the height of Burj 2020? While Smith and Gill are advising DMCC on how high the centrepiece of this urban habitat should soar, their primary aim isn’t to create another record breaker – and why should they with two already under the belt. The aim is to create a gateway to Dubai’s south

Adrian Smith and Gordon Gill with DMCC executive chair, Ahmed Bin Sulayem

DMCC executives at the project launch at Cityscape Global 2015 with Sheikh Maktoum

district that will serve DMCC’s existing tenants and also provide world class space for its prospective tenants. As of yet, the final height is undetermined and calculations to find the sweet spot between iconic and efficient are ongoing. Adrian Smith explains: “There are technical and marketing issues we don’t know the answer to right now, which is why we haven’t confirmed the height of the tower and also why we don’t want it published. Going back later and correcting that information isn’t ideal, which is why we are currently only talking about it in a conceptual and abstract way.” It’s an approach which calls back to their strong connections with nature. AS+GG as a firm has managed to imbue a culture of auteurship in many of its projects and as a result

they are instantly recognisable on their respective horizons. That is why, when Smith and Gill are asked about their d’etre, global architectural trends will not be their answer. Gill explains: “I think that when we started working together and also through my schooling I am closest drawn to what is behind the look. I am very curious about the essence of something or a place. I know that the beauty of something is more than skin deep. If you are genuinely beautiful it comes from inside and it has a much deeper legacy to anything. I think we, and I, are very interested in the meaning behind why something is the way it is. So as much as we are interested in the things we see physically, it is nature and cultural context – the things you don’t see – which are the most influential elements.” construction business news me October 2015 49

SUSTAINABILITY

The

Great Greenwash Construction Business News ME speaks with sustainability experts to discuss the role of greenwashing in Middle East’s construction industry

hat are your observations of the current state of “green construction” in the Middle East today? AL ABBAR: The green construction industry has grown significantly in the Middle East in recent years. There is an increasing knowledge and understanding of which green materials, processes, equipment and systems are beneficial to projects in terms of water saving and energy efficiency. Today, we see significant strides being taken in the region to promote energyefficiency in the built environment. Authorities throughout the GCC are increasingly implementing regulations and rating systems that are setting high standards for new construction projects and throughout the industry. We have also noticed an increasing number of experts as well as test or pi50 construction business news me October 2015

lot projects in the region to support research and enhance the knowledge and confidence of the authorities and the industry. Masdar City and Qatar’s Passivhaus project are good examples of the commitment of the authorities to green buildings. In addition, there is a strong positioning by the local GCC or MENA Green Building Councils to support the authorities and the construction industry to get greener. In the UAE particularly, a focus on sustainability has become part of the country’s philosophy, regulations, standards and practices. The importance of green building in the country is evident. A rising number of green buildings are LEED (Leadership in Energy and Environmental Design) and Estidama Pearl certifications, not only to align with government regulations but also driven by voluntary decisions from developers, contractors and other parties involved.

Along with this increased interest within the industry, we have witnessed the creation of more sustainable building awards, as well as a stronger impact and exposure of frameworks and reporting systems like the Global Reporting Initiative (GRI) and the UN Global Compact, which promote the use of sustainability reporting as a way for organisations to become more sustainable and contribute to sustainable development. COLACO: Contractors, suppliers and supply chain in most Middle East countries are slowly becoming aware of the green requirements. They are now better connected with international sources of green products, equipment and supplies due to popularity of both international green rating systems like LEED, and government green building regulations such as EHS Trakhees of Dubai, Abu Dhabi’s Estidama, Dubai Municipality, Qatar’s GSAS, Saudi GBC and Kuwait GBC.

available points under the stated credit categories;

Errol Colaco, head of sustainability at Energy Management Services Emirates LLC

Yasmeen Al Rashedi, senior manager of the Estidama Department at Abu Dhabi Urban Planning Council

Saeed Al Abbar, chairman of EmiratesGBC

There are still those who follow conventional practices either knowingly or out of ignorance and camouflage it through shallow, unsubstantiated, selfstated claims. Absence of a unified green criterion between different rating systems and authorities has led to confusion in the construction industry. AL RASHEDI: The UPC has monitored a lot of successful sustainable projects from inception to completion in recent years. Along the journey, as our programme has matured, we have seen projects make mistakes, learn lessons, and implement those learnings gradually to improve the end result. The green construction industry is improving and constantly evolving as new technologies emerge. For this reason I think the green industry is strong with an increasing client awareness of potential energy cost savings being the driving factor.

Greenwashing is the practice of overpromising or misleading on the beneficial effects products or services will provide. Based on this definition, how widespread do you believe greenwashing to be in the Middle East and do you have any examples? COLACO: Greenwashing is indeed prevalent in the Middle East market. The most common examples would be • Suppliers who claim paper products are “recyclable” when the actual requirement calls for “recycled” paper products; • Owner claims he saved 15% of energy, when actually the reduction was due to lower AC consumption due to cooler weather compared to previous year; • Product flyers depicting exaggerated claims such as company X’s LED lamps provides total of 20 LEED points when actually LED alone cannot reach the threshold levels required to achieve all the

Experts in the US say the problem of greenwashing is endemic in the green construction industry and is likely to get worse. How should this be addressed? COLACO: Greenwashing in some form or the other will always be around. The challenge is how to filter and expose bad apples from good ones. Responsibility lies collectively with owners, developers, sustainability specialists and authorities. Owners and developers should rely on third party consultants and specialists with a proven track record. They should have in place an implementation strategy at the outset to facilitate an effective transition between design, construction, fit-out and operation stages. Construction documents should spell out sustainability requirements in sufficient details. An effective monitoring and approval process will ensure that right products and practices are procured, implemented and commissioned. Tenant fit put packages should have similar clauses making it mandatory for tenants to comply with sustainability requirements. Measurement and verification protocols and re-commissioning requirements should be adhered to by operators and facility managers to maintain the ongoing sustainability of the development. Local authorities such as UAE’s ESMA and Dubai Municipality can play an important role in certifying the environmental attributes and claims of green products. A robust review mechanism by the authorities over the life cycle of the development, coupled with trainings and awareness programmes, will minimise green washing. AL ABBAR: I don’t think greenwashing is endemic to the construction industry, but the perception that building green is more expensive continues to prevail. This needs to be tackled with education, trainings, workshops, etc. to prevent it from posing difficulties to the growth of green building and further move towards a more sustainable industry. AL RASHEDI: In my opinion, the ‘green’ label is often overused, and without con construction business news me October 2015 51

SUSTAINABILITY

text, i.e why is this product or service being labelled green? It is added to products and services, as an add-on which may not be warranted. This can be misleading. The best method of addressing concerns is by questioning and assessing proposals with greater detail. Clients and consultants are now becoming more informed of green products and services. The preparation of a concise set of project or client requirements can be used as a measure for any proposals. This will quickly identify what is being exaggerated and is not required. The difficulty arises when a new product or new service is announced; this is an unknown and must be examined carefully. When examining problems it is important to consider the successes which will far outweigh the problems. Could you give a rough percentage on how many companies you think are greenwashing in the regional construction industry? Why do you think these companies resort to greenwashing? COLACO: It is difficult to put an absolute percentage. A more important measure would be the degree to which companies engage in greenwashing, and this varies from company to company. Most companies would have an assortment of products each with varying degrees of compliance to environmental attributes. Many of the green products and services come at a cost premium. There is also the issue of long lead times as some of these products need to be imported. Last but not least, there is still a lack of awareness of green practices and understanding of green specifications among consultants, suppliers and contractors. With ever increasing growth in construction and so many companies competing for business, cramped project timelines, tight budgets and eagerness of end users to project them as green, greenwashing is unlikely to be eliminated but can only be minimised.

ects. Contractors who align themselves with specialist sustainability consultants or have experienced personnel with the required sustainability experience are likely to deliver green projects as intended. Contract becomes an important tool for the developer to specify and enforce the green requirements. Appointment of third party independent commissioning agent and sustainability consultant by the developers to specify, verify, validate and report the consultants and contractors claims will mitigate greenwashing to a large extent. AL RASHEDI: Companies must be able to demonstrate a holistic approach, an entire company structure with key personnel provided to deliver project requirements. Sustainable companies must provide cost and energy options to prospective clients, and if a prequalification is returned with no questions or suggestions, in my opinion it wouldnâ&#x20AC;&#x2122;t indicate foresight or an intent to deliver a sustainable service to the client.

In a scenario where a developer is looking for a â&#x20AC;&#x2DC;greenâ&#x20AC;&#x2122; contractor, how do you recognise services that are greenwashed? COLACO: Contractors can be judged based on their track record in green proj-

What role do green consultancies play in this scenario? Are they key to finding the right way to transform? AL ABBAR: Consultancies with dedicated sustainability teams can support and

52 construction business news me October 2015

guide each stakeholder in order to making the right or reasonable choices that ensure a project meets its sustainability targets. They can help decide what stakeholders should be involved and provide support with the commissioning process. They can also offer advice on design, materials and equipment, as well as on what processes and policies should be observed to ensure compliance with regulations and rating systems. AL RASHEDI: Consultants are key, but clients need to be able to place their full trust in the consultant. Do certifications such as LEED help avoid green washing? How important is certification, and how does it support the construction industry? AL ABBAR: It is important to note that a building can be sustainable and incorporate green best practices without having a certification behind it. Certifications, however, are useful tools for measurement and can serve as guidelines for best practice. Green building rating systems and regulations, such as LEED or Estidama Pearl, set standards to be achieved by the construction industry with regards to design, materials, equipment, training and communications. They are of great support to

The growth of ‘green’ firms, 2012-2015 100

2012

provide benchmarks to the industry and the market, as green buildings are now considered the “new normal” thanks to regulations and communications. LEED, for example, has been commonly used in the UAE; taking advantage of its global, regional and local applicability to create structures that mitigate greenhouse gas emissions; create healthier indoor environments for workers, students and community members; and lower utility bills for building owners through reduced energy and water use. With new regulations and other government initiatives focusing on the promotion of green building and sustainability, LEED has become even more popular in the UAE, having recently been featured number eight in the top 10 LEED countries ranking published by the US Green Building Council (USGBC). AL RASHEDI: While there are many benefits to following the LEED programme, the UPC created and manages the Emirate’s sustainability programme, the Estidama Pearl Rating System, which became mandatory for all new buildings in Abu Dhabi in 2010 holistically addresses sustainable design, construction and operation. Its relevance results from how it has been tailored to dealing with the specific challenges posed by the region’s arid

2015

zil Bra

Sin

U.A

ore

gap

any

y rwa No

U.K

lia stra Au

U.S

Source: McGraw Hill WGBC Report – World Green Building Trends

U.S

Australia

U.K

Norway

Germany

Singapore

U.A.E

Brazil

2012

40%

28%

45%

23%

17%

64%

48%

24%

2015

53%

47%

68%

49%

36%

89%

74%

50%

desert climate. The Estidama Pearl Rating System is the fastest growing sustainability rating system in the world and has certainly contributed to advancing the UAE’s sustainable growth. The UAE is in the top 10 LEED certified countries in the world, how does that reflect in the overall sustainability of the country’s construction industry? AL ABBAR: The increased popularity of LEED throughout the UAE shows that the construction industry in the country is changing, and green building standards are becoming mainstream. To us, as an independent organisation working towards promoting sustainable built environments, strengthening awareness of green buildings, ratings and other aspects to all stakeholders is our mandate. Finding the UAE featured in this list proves that the communications and education of professionals, developers, authorities and communities are working.

COLACO: In the year 2008, when H.H. Sheikh Mohammed Bin Rashid Al Maktoum announced that all new developments in Dubai has to be green, the only readily available benchmark which was acceptable to the community at large was the LEED certification programme, with EHS Trakhees being the first to adopt it. LEED’s popularity slowly spread to the whole region. In my opinion LEED allowed instant implementation of the green directives, giving time for authorities to create and formalise green regulations specific to its jurisdiction. By the time local regulations like Estidama, QSAS, DM green building were in place, the green construction industry was somewhat familiar with the green concepts through their LEED projects experience. LEED along with local green building regulations and the will of the UAE government has definitely placed the green construction industry in the path of green maturity. construction business news me October 2015 53

SUSTAINABILITY

Green steps

GCC governments are imposing new standards to minimise greenhouse gas emission and limit resource depletion. Construction companies can play a direct role in this process, write Dr Ioannis Spanos and Francesca DePetris

he impacts of global warming are highlighted often on the front pages of newspapers, but what is often overlooked is the role of industry; manufacturing, transportation and construction may be major polluters, but the greening of such industries could create entire new revenue streams and business opportunities. According to data from the United Nations Environmental Programme, globally, out of the total emissions related to buildings, approximately 80% are related to operational energy consumed during occupancy with 20% of emissions are emitted during manufacturing of construction materials and during the construction process. Considering the overall construction emissions, for buildings and infrastructure, around 10% of the UK national emissions are associated with the manufacturing and transportation of construction materials and with the construction process. In addition to carbon reduction emissions, green construction activities allow preventing and minimising land pollution, increasing water consumption efficiency, reducing noise and traffic levels and maximising waste diverted from landfill. Especially on waste, statistics in Europe and the US report that construction and demolition waste alone can amount up to 30% of total generated waste, more than 70% of which can be recycled. International experience has proven that much can be done to change these trends. Lately, stakeholders and developers in GCC have become aware of the benefits of sustainability; how-

54 construction business news me October 2015

Dr Ioannis Spanos is the senior sustainability manager at KEO International Consultants. His consultancy and project management experience includes the development of low energy, environmental friendly and sustainable urban solutions in UK, West Africa and GCC during the last 14 years. He is a Chartered Energy Engineer and following a Doctorate in the physics of energy in urban environments, he has been exposed in the design and development of projects within all building sectors.

ever, more work is required in order for these benefits to be fully applied in the construction sector at a wider scale. The right mix of initiatives from both the public and private sector has proven to be most effective in implementing innovation and best practice internationally. GCC governments are imposing new standards to minimise greenhouse gas emission and limit resource depletion. Construction companies can play a direct role in this process. The following ten points describe active steps which can be adopted to

make a transition towards a greener construction process: 1. Sustainability knowledge should not remain the exclusive domain of a sustainability consultant embedded in the construction team. Sustainability requirements should be common knowledge amongst management, shop drawings production, procurement and staff onsite. The senior executive directors, the company board and the senior management have to â&#x20AC;&#x2DC;buy in sustainabilityâ&#x20AC;&#x2122; as they may be

continuous improvement process, by the final authority when critical situations are escalated and a quick decision training staff at different levels. Companies with an ISO certification, or is required. Greening a construction company, of any size, requires challeng- continuous learning programmes, at all levels, will find the process much ing existing processes, making them more efficient away from blindly follow- easier as continuous learning can rekindle motivation, understanding ing ‘business as usual’. of best practice and ultimately lead to 2. Sustainability starts well before the long-term sustainability initiatives. actual works on site by having a plan of delivery based on sustainability prin- 8. Teams should be encouraged to share knowledge and ideas: holding ciples; principles which in most cases regular workshops between differreflect international best practice. 3. Sustainable construction processes have ent construction teams to look at ways to eliminate environmental and to foster openness and collaboration sustainability impacts, hazards or between internal teams and external risks can provide a better communistakeholders, working towards a comcation vehicle of green knowledge mon target of creating truly sustainable than having dedicated training on projects. This means that some barriers sustainability. may have to break down and all involved parties should work together to 9. Knowledgeable construction comachieve the targeted sustainability goals. panies could challenge the design for better sustainable solution at no 4. Green procedures have to be embedded in the contractual appointments and extra cost during the construction stage; a well-informed sustainability subcontractor orders, focussing equally consultant can provide support to on sustainability compliance, materials the client, designer and contracselections and actual construction. tor to achieve a common beneficial 5. Sustainability compliance requires well outcome. informed procurement and expert 10. Sustainability criteria of materials knowledge of the market; a sustainmust always be tagged within the able material is not always expensive specific material submittal. Sustainnor are low cost items always nonsustainable. Construction companies are ability criteria of any scheme (LEED, usually more successful on sustainability Estidama, GSAS, CEEQUAL) have to be always linked to specifications deployment when they believe in “one and drawings, specifications and team" approach. drawings have to be linked to orders, 6. Introduce a sustainability “charrette" in orders of sustainable materials have every project, where the sustainability to be linked to the deliveries on site criteria of the project can be analysed and, finally, all works and commisand clear targets can be given to consioning has to be linked to the initial struction team leaders. sustainability criteria. 7. Sustainability should be considered a

Francesca De Petris is an architectural engineer specialising in sustainability and construction management, currently working as a sustainability manager for KEO International Consultants. De Petris has 15 years international work experience, with over 8 years’ experience of construction supervision in Europe and the Middle East. De Petris holds an MSc in Science of Architecture with the Polytechnic of Turin, Italy and an MSc in Environmental Design of Buildings with Cardiff University, UK.

Some of the common practical green requirements within different international rating systems are: • Segregate waste on site and agree with companies for removing the waste going to recycling plants • Have holistic project operational and construction environmental management plans; procedures on-site have to be clear, interconnected and have regular and structured quality checks • Avoid procurement of high VOC content materials and finishes: paints, adhesives, sealants, carpets, floors • Prefer the use of energy efficient machines and equipment, avoiding leaving them running idle and channelling their exhausts away from workers or occupants

Know your building systems • LEED (Leadership in Energy and Environmental Design) – volunteer based and developed by the US Green Building Council. Includes requirements for contractors to follow during the construction stage. Enjoys global recognition. • Estidama – a mandatory system devised in Abu Dhabi and applicable to all new buildings in the emirate on a five point sliding scale • GSAS (Global Sustainability Assessment System) – a Qatari system also used in other GCC countries such as Kuwait and Saudi Arabia. LEED and Estidama incorporate requirements for contractors in the same rating that is applied to the design process, while GSAS or CEEQUAL (a UK sustainability assessment, rating and awards scheme for infrastructure) have created individual schemes to assess sustainability of the construction process alone.

construction business news me October 2015 55

Q&A

Healthy FM

With the last recorded population in the UAE to be 9.2 million in 2013, the current healthcare sector is under pressure to provide more facilities. This is the same for any country, even the UKâ&#x20AC;&#x2122;s long-established healthcare system has been growing at a steady rate of 5%. As the the UAE massively invests to improve its sector to match world leaders, CEO of Enova Alexandre Mussallam speaks with Construction Business News ME about current challenges faced in energy and facilities management in healthcare In a hospital, the best facility management plan is preventative, not reactive as this decreases the risk of failure, as any issues are flagged before the problem has fully materialised.

How is maintaining a healthcare building different from a commercial building? Managing facilities within a public building must always factor in customer comfort and this is really important. But in a hospital, we further reinforce our approach to reliability as the day to day running of the hospital is vital for easing patient discomfort during a 58 construction business news me October 2015

particularly stressful time. The major difference between maintaining a healthcare building and a commercial building is how time is condensed. If something is not functioning efficiently in a healthcare facility, the response time is much shorter than in commercial buildings as more is riding on optimal facility management.

How does effective FM affect the performance of a health care facility and the resulting recovery of its patients? Competent FM in a sensitive sector such as healthcare is critical. With medical equipment relying on facilities managed by third party companies, failure can result in life threatening or tragic circumstances. Bedside manner is proven to have an impact on patient recovery and, based on the same principle, a building that looks and smells clean, that operates smoothly and functions with patient care as a priority can ease the stress brought about by the traumatic experience of being in hospital. One of the top priorities for FM in healthcare centres is the air quality. Our company takes additional care and practices special procedures over the maintenance of the air conditioning systems and frequently test air quality. We also guarantee the maximum availability of equipment to ensure there is not a lack of vital tools. The clinical team must be confident that their supporting services run flawlessly and aid in patient care.

What are the common challenges faced in maintaining a healthcare facility in this region? And what are some common mistakes made during maintenance? Some of the major challenges faced in maintaining a healthcare facility is ensuring the continuity of services to the site, including the provision of reliable and consistent energy. Any oversight in these areas could compromise the health and wellbeing of the patients. It is important to remember that while healthcare facilities can have similarities with commercial facilities, they cannot be maintained in the same way as a commercial or residential facility. For example, proper maintenance of the air-condition and filtration systems is paramount in a hospital environment to avoid the spread of disease or contamination, not only for the facility as a whole but also for specialised wards such as operating theatres, intensive care units or laboratories. As such, the type of equipment used has to be adapted to meet the unique requirements. With the healthcare industry quickly growing across the region, local facility management companies should use this opportunity to seek advice from international providers in mature markets who have the knowledge and experience of maintaining operations of large scale healthcare facilities. Could you talk about how hospitals could implement better energy saving in their facilities? To optimise energy saving in facilities, hospitals should adapt the temperature to the specific needs of each area. The needs for each room differ between public areas, patient areas, occupied and unoccupied rooms, medical areas and technical rooms and to provide the same services to each room is a waste of energy. Furthermore, ensuring the distribution of energy is well balanced and managed by using the most suitable production equipment adapted to the specific needs of the hospital and maintaining it properly. Veolia, Enovaâ&#x20AC;&#x2122;s shareholder, fully

Saudi German Hospital, Dubai

manages the utility plant in a number of hospitals across the world, so Enova is best suited to combine their international expertise with a thorough regional knowledge of the Middle East and offer an excellent healthcare service. Most companies in the GCC are interested in promoting medical tourism. Do you think regional facilities have the potential to be a medical destination? The plan to make Dubai a medical tourism hub is supported by the Dubai Health Authority and the UAE government. Globally, the concept of travelling for medical treatment is still in its infancy and the UAE has already established itself in the top 20 destinations, due to its illustrious and luxurious tourism industry. Competing with traditional destinations such as the United Kingdom, Thailand, Switzerland and Germany, the UAE has more to achieve before it can claim the top spot. Medical tourists currently have a choice of 30,000 healthcare professionals and 3,000 facilities to choose from but by 2020 this is predicted to grow to 40,000 professionals in 4,000 facilities across Dubai. Another part of the governmentâ&#x20AC;&#x2122;s large-scale plan for this ambitious project is to build 22 state-of-the-art hospitals to accommodate the anticipated half a million medical tourists. Efficient FM will play a part in setting Dubai apart from the competition.

With improving the healthcare offerings in the UAE being a priority and billions of dollars invested in making this a reality, Dubai is well positioned to become a medical tourism hub. Intelligent SME states that medical tourism contributed for 8.7% of tourism in 2012 and this is expected to grow exponentially. Healthcare IT spending in the GCC is set to grow by 24% percent from $444m in 2011 to $551m in 2015, according to a recent report from Alpen Capital. Does this affect FM, especially when talking about integrated systems? Data management affects all markets, including facility management, but not only for the healthcare sector. In the past few years, our work in facility management has changed drastically thanks to the use of tools that collect and analyse data, thus making us more efficient in delivering maintenance services and allows us to guarantee energy savings. Enova has developed the Energy Saving Centre which provides an overview of the actual energy consumption of a site. This allows our team of technicians to personalise a service plan for each individual customer, which ultimately optimises maintenance and energy savings. The Energy Saving Centre would be a powerful tool that would help maintain healthcare facilities as it highlights any potential issues so they can be rectified before reaching crisis level. construction business news me October 2015 59

SUPPLIERS News

Panasonic eco-solutions targets construction

GEZE awarded Al Jalila Children’s Hospital contract

EZE has been selected to endorse a full solution for the automated and manually controlled doors in Al Jalila Children’s Specialty Hospital a state of the art project with 200 Bed Hospital that shall provide tertiary and quaternary specialised pediatric health services. All entrances of the large hospital building are equipped with GEZE Slimdrive SLNT, featuring a 7cm operator is barely visible when installed on the aluminum transom. The operator is connected with the main building management system to ensure complete control and maximum safety

Panasonic Marketing Middle East and Africa (PMMAF) is strengthening its efforts to grow its eco-solutions business with a newly refurbished flagship store, opening soon in Dubai. The facility will displaying the entire spectrum of electrical construction materials, air moving solutions for better Indoor Air Quality Management, sustainable energy Solar products and LED Lighting Fixtures. According to Tatsuya Kumazawa, director, Eco Solutions Division, PMMAF: “With the increasing demand from the construction sector for our products, we now offer a wide range of solutions for the entire eco solutions space. We are also in the process of refurbishing key Panasonic outlets in the region to give our customers the bigger picture of our offerings on a single platform.” In addition to its high quality Indoor Air Quality (IAQ) solutions, Panasonic is also engaged in awareness programmes to educate customers on the importance of ventilation solutions which are essential for a healthy living. PMMAF is developer of one of the most efficient solar panels in the world as it enables more power generation per square meter than conventional solar panels; and energy saving LED bulbs and fluorescent lamps, lighting fixtures and lighting control systems.

in case of emergencies. Other products specified include GEZE Powerdrive PL for heavy doors, selected to operate the heavy sliding door leafs with a carrying capacity of 200kg/leaf and the ability to smoothly move the door for a wider clear opening passage. The architects also relied on GEZE Slimdrive EMDF system as a solution for the automatic swing doors inside the hospital building. The Construction of Al Jalila Children's Specialty Hospital was completed this year and is exclusively fitted out with over 1,500 specialised products and drives from the GEZE Slim Line Range which provides the facility with an inclusive and fully automated solution for the doors at the entrance area and for the internal automated/controlled doors within the hospital.

V-Kool opens new RAK showroom Desso project pipeline V-KOOL, vendor of high-performance premium window film for automotive and architectural glass, has opened a new showroom in Ras Al Khaimah. The well-appointed outlet, which showcases the entire range of the brand’s premium tints, is a part of V-Kool’s vision to make its products available easily across the UAE. The showroom was inaugurated in the presence of K T Govindarajan, president, V-KOOL, KAPICO Group, members of the V-KOOL UAE team and other guests. The products available at the outlet include V-KOOL™’s total car care solutions – the Ultramaster series, the V-KOOL Signature Series – J60 film, which rejects 99% of UV rays. It’s the world’s first wavelength selective window coating that provides a virtually transparent protective barrier against the sun’s heat and radiation. “V-Kool will make its entire range of super protective film coatings, which combine high performance solar control with high visible light transmission, to our discerning customers in Ras Al Khaimah,” said Mr. K T Govindarajan, President, V-KOOL, KAPICO Group.

60 construction business news me October 2015

valued at $1.3m

esso’s patented flooring solutions have been specified in contracts totaling $1.3m. The projects include The Cranleigh School in Abu Dhabi which selected Desso to install 5,600-square metres of its carpet tiles, and the capital’s Khalifa University commissioning a 14,500-square metre new carpet installation. Other projects include the GEMS Schools regional rollout with a total of 20,200 square metres of carpeted space, and a number of

ADEC Schools in Abu Dhabi, totaling 9,000 square metres. This year, Desso will deliver its award-winning patented flooring solutions to more than 25 schools and universities covering a total area of over 80,000 square metres. These projects are just some of the 355 educational projects currently active in the region; the majority of which (92%) are being developed in Saudi Arabia, followed by Qatar, Kuwait, Oman, and the UAE.

Awards

Qatar 2015

OCTOBER 18, 2015 Ritz-Carlton Doha, Qatar

Have you nominated your project yet? Choose from one of the categories below: INNOVATION OF THE YEAR HEALTH & SAFETY INITIATIVE OF THE YEAR SUSTAINABLE PROJECT OF THE YEAR SUPPLIER OF THE YEAR YOUNG ENGINEER OF THE YEAR

CONTRACTOR OF THE YEAR ENGINEER OF THE YEAR OVERALL PROJECT OF THE YEAR MEP CONSULTANT OF THE YEAR SPECIALIST MEP CONTRACTOR OF THE YEAR

CONTACTS For sponsorship & nomination enquiries contact: Awards@bncpublishing.net Nominations close September 27th

Nominations close October 10th

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Event preview

ThInk Big

Construction Business News ME looks behind the scenes in the run up to the biggest construction event in the region

erving as a networking platform for construction product suppliers and buyers since 1979, The Big 5 International Building and Construction Show has become the largest construction show in the Middle East breaking regional records last year with over 2,801 exhibitors and 81,401 participants. According to Andy White is vice president of dmg events ME, organisers of the show, the slight dip in contract awards this year will not affect the growth in construction activities in the region. He said: “The Big 5 in Dubai is a main focus for suppliers to the region from across the world. Major infrastructure projects in Saudi Arabia and UAE have and will continue to drive diversification, but what we've also seen is large-scale investment being sustained across Oman, Kuwait, Qatar, and Bahrain.” Report by Ventures Onsite, GCC Construction Industry - Trends and Challenges for 2015, states that the value of contract awards this year in the GCC could reach over $194bn. This value has dropped by two billion, however the further dip in oil prices will mean building materials and transport costs will fall and that will filter down to contract values. White says that even though oil prices and its affect in construction markets has been heavily discussed, each of the GCC nations has shown continued heavy investment in infrastructure, housing, and healthcare. “Kuwait has more than trebled its contract awards this year, and the Saudi government has made it clear that it will continue to invest. The GCC Secretariat General has also announced that the Gulf Rail network is meeting construction deadlines and is on track to meet its 2018 deadline. “In the UAE, billions of dollars of investment in retail sectors, the 62 construction business news me October 2015

2014 statistics: • 2,801 exhibitors from 61 countries • 81,401 participants from 147 countries • 55 free CPD certified educational events

The show has eight product zones: • General construction • Coatings, adhesives and sealants • HVAC • Steel • Building Interiors • Water technology • Windows, doors and cladding • Kitchens and bathrooms

The Big 5 app

This year, visitors and exhibitors will have access to The Big 5 mobile app, available to download for free. The app provides a list of features including full event schedule, a personalised agenda, exhibitor listings, floorplan maps, and social networking. It also includes speaker listings and the latest exhibitor information while also allowing visitors to schedule their own meetings and win prizes throughout the event.

continued development of tourism and hospitality sectors, and upgrades to airports, transport, and logistics infrastructure mean construction is once again expected to be one of the biggest contributors to its GDP.” Major projects such as the Expo 2020 are behind the growth of the industry and could create up to 277,000 new jobs, while projects put on hold between 2008 and 2010 are now being revived by the same developers or new developers. White emphasises that The Big 5 is a good way to generate sales leads and develop business interests in the Middle East. “It is the focus of suppliers to the region and offers the chance to meet more than 2,800 manufacturers and distributors, source thousands of products that are certified and locally available, find cost saving and sustainable solutions to projects, and select from over 30,000 innovative products that are unavailable anywhere else.” In addition to these benefits the event has developed a reputation for offering visitors an unrivalled range of free professional development opportunities, including 64 CPD-certified workshops. As the demand for certified equipment, building materials, and expertise increases, The Big 5 will increase in size again in 2015. This year, the show will occupy new hall space at World Trade Centre with a section called The Big 5 Focus, which would be designed to make it even easier to find certified products that are available locally. Two major shows co-located with The Big 5 include the Middle East Concrete 2015 and PMV Live 2015, the show for all mechanical vehicles involved in construction. Last year the shows had over 36,000 international visitors. Nathan Waugh, dmg events’ portfolio director for the two shows, says: “The global construction equipment market is forecast to reach $241bn by 2020 and growth in the Middle East is a major part of this figure.”

The Big 5 Dubai 2015, together with Middle East Concrete 2015 and PMV Live 2015, will run from November 2326 at the Dubai World Trade Centre. construction business news me October 2015 63

SAVE THE DATE

Upcoming events A round up of the latest and most sought-after exhibitions, conferences and seminars coming up in the construction industry

Construction Innovation Awards, Qatar

October 18, Ritz-Carlton Doha The Qatar edition of the Construction Business News industry awards, will award companies across 15 categories recognising the projects and people who have contributed towards the industry’s greatest innovations in the Gulf powerhouse that is Qatar. For information on nominations and attendance, email awards@bncpublishing.net

Eye on earth

6 – 8 October St Regis, Saadiyat Island, Abu Dhabi Eye on Earth addresses the crucial importance of environmental and societal information and networking to decision-making. It aims to convene thought and action leaders of the worldwide community, converge consensus on the key areas of mutual importance, and finally collaborate towards strengthening existing initiatives and filling the gaps into the future.

Light ME

6 – 8 October Dubai World Trade Centre The Middle East’s Premier Conference and Exhibition for Lighting Design and Technology, held under the patronage of the Dubai Municipality, Light Middle East will present over 325 exhibitors showcasing a huge range of international brands. The three-day event will offer a comprehensive interactive platform for manufacturers, architects, designers, consultants, engineers, construction companies, hospitality industry professionals, government officials and more.

Leaders in Design

15 – 16 November Dubai Leaders in Design MENA is key meeting place for interior design professionals from the region to discuss the latest global markets trends in the industry as well as learn and source 360° solutions for their diverse portfolios of projects. For years Leaders in Design MENA has encouraged business connections between international suppliers and interior designers providing a unique opportunity to explore the needs of the projects and get inspired by leaders, luminaries, and 64 construction business news me October 2015

The Big 5 - 23-26 November, Dubai World Trade Centre

legends from within and outside interior design industry and explore the potential that the region can offer.

The Big 5

23 – 26 November Dubai World Trade Centre For over 35 years The Big 5 in Dubai has been home to the largest gathering of construction professionals in the Middle East. With exhibitors showcasing thousands of certified and innovative products from across the globe, free CPD certified workshops on offer and live product demonstrations, there is enough information for professionals from any discipline of the construction industry. This year the show will feature: 2,800 exhibitors from over 65 countries; 64 free certified educational workshops; 80,000 construction professionals and key buyers.

Maintenance Middle East

23 – 26 November The Address Hotel Dubai The 21st annual Maintenance Management Conference provides a 360 degree overview of the latest methods in improving your maintenance management strategies and driving business KPIs. With a new, case study-driven agenda, the conference will provide practical guidance and field based techniques to key challenges executing maintenance strategies and tactics including; implementing an RCM strategy, improving equipment reliability, retaining skilled manpower, implementing ISO 55000 and understanding the latest technology advances and ROI maximization strategies for CMMS. Maintenance Management continues to cover all sides of the business and continues to be the only established maintenance gathering in the region attracting over 100 industry leaders annually.

LEADERS IN DESIGN MENA

15th-16th November 2015 Dubai, UAE www.interiorsummit.com Where Design Meet Business

The Only True International Event that Hosts the Design Community from Across the World Leaders in Design MENA Summit Speakers

Sponsor

Exclusive Media Partner

Media Partners

For more information and registration, please call us on Tel:+ 420 601 354365 or email: registration@intlbc.com Organized by: www.intlbc.com construction business news me October 2015 65

NEWS PICK EDITOR'S

UAE prepares for GMIS

Adding to the diversity of its corporate events calendar, Abu Dhabi will host the first Global Manufacturing and Industrialisation Summit in September 2016

he UAE and the United Nations Industrial Development Organisation (UNIDO) has made a global announcement for the upcoming Global Manufacturing and Industrialisation Summit (GMIS) series in Al Ain, while follows a year-long global campaign to generate support from public and private sectors for the initiative. The summit is an attempt to develop a global platform to discuss innovation in manufacturing by the UAE’s Ministry of Economy and UNIDO in collaboration with World Economic Forum’s Global Agenda Council on the Future of Manufacturing. It intends to address diverse aspects of manufacturing including innovation, infrastructure, small and medium-sized enterprises, value chains, industrial policy, the environment and skills. It aims to promote global standards amongst the sector by bringing together representatives from governments, industries, civil society, and academia, under one roof. At the presentation of the GMIS initiative on June 2, 2015 in Abu Dhabi, UAE, UNIDO Director General Li Yong said that the Summit would be a catalyst for meeting these goals in line with manufacturing’s proven historic record as a crucial source of national and international development. UAE’s Minister of Economy H.E. Sultan bin Saeed Al Mansoori said that the summit was designed to create a global movement to help drive transformation in the manufacturing and industrial sector, and create sustainable economies and inclusive societies worldwide. “This is a long-term process for which the inaugural summit is the beginning, not the end,” he stated.

Linking the global north and south The announcement was made among several delegates and press gathered at Mubadala's Strata Manufacturing 66 construction business news me October 2015

Dignitaries at the Strata Manufacturing facility in Al Ain

Director General of UNIDO Li Yong at the Global Announcement Ceremony

Global issues to be examined at GMIS: • The relationship between low and high value added manufacturing activities • Social and employment issues surrounding manufacturing and related urbanisation • The skill needs by manufacturing firms and how can they be catered for • The impact of incentives on manufacturing investment • Leveraging technology for innovation • How to integrate better SMEs into global value chains • How manufacturing and environmental concerns can be aligned

facility. H.E. Al Mansoori along with Li Yong addressed over 200 delegates from the public and private sector and guest of honour, President of Guinea Prof. Alpha Condé, on the objectives and progress of GMIS. During the ceremony, UNIDO entered a partnership with Republic of Guinea to assist the development of the West African country’s industrial sector, by policy advice and research and studies to create job opportunities. President Condé looks at the agreement as a step towards establishing policies on industrial innovation and diversification. Impressed with UAE’s progress, he said that developing economies have to have the courage to move away from what they know and grasp the opportunity to develop something new. He aims to use diversification as a solution for Guinea’s economy and not to be at the mercy of commodity pricing. “We must diversify into new industrial options, so that our GDP can grow not just because of increased commodity prices or enhanced production, but because it has developed new value propositions that are adjacent or separate to existing economic drivers.”

construction business news me October 2015 67