Big Project ME July - August 2020

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THE BUSINESS OF CONSTRUCTION

BIG PROJECT ME HEARS HOW VOLTAS LIMITED’S VALUES AND PRINCIPLES ARE GUIDING IT THROUGH A CHALLENGING MARKET

Tafawuq provides technology driven integrated facilities management solutions to a wide range of clients in various sectors focusing on residential, commercial and mixed use communities

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CONTENTS

July-August 2020

08

16

18

20

28

40

ANALYSIS

FEATURES

INSIGHT

08

The briefing

20

36

Comments

The big picture

Gavin Davids speaks to Suresh Kumar of Voltas Limited about why he believes the Indian MEP giant will continue to thrive in challenging market conditions

40

Event review

Industry leaders discuss using technology for remote working and how AI will shape the GCC’s smart cities

12

In profile AR Suresh Kumar

The industry’s brightest minds share their thoughts on a variety of topics and issues impacting the construction industry

Providing a wrap-up of the biggest local, regional and international construction news stories

28

Big Project ME recaps the first-ever Virtual Value Engineering Summit, a four day event held from June 28 to July 1, 2020

16

Market report

Big Project ME speaks to the team behind the delivery of the new campus for Heriot-Watt University in Dubai

44

Tenders

18

Analysis

48

Progress report

KPMG report examines Dubai’s real estate market sectors in the wake of the COVID-19 pandemic

Experts from Accuracy, the international consultancy, warn that construction firms need embrace pragmatism before it’s too late

Project profile Building on Values

Big Project ME, in association with ProTenders, provides the biggest tenders for the month of July/August 2020

Union Coop says work on its Warqa City Mall project in Dubai is at 92% and that the project will be handed over in July 2020

MEConstructionNews.com | July-August 2020

2

WELCOME

Introduction

Evolving and adapting

H

ere we are now, well and truly into the second half of 2020 and in normal circumstances, excitement would be building as we’d be just three months away from Expo 2020 Dubai launching, with all the associated projects coming online as well.

Unfortunately, the reality is that we’re still caught up in the fog of uncertainty generated by the COVID-19 pandemic. However, while the long-term predictions for countries and economies continue to be unclear, in the shortterm, industries and companies are rapidly adapting to the new normal, with remote working, using the cloud and digital meetings becoming commonplace across the world.

Construction too has been quick to adapt, despite the many criticisms it has previously received for being too slow to change, and it’s clear to see that many companies have finally realised the capacity and potential of a digital transformation. It’s just a pity that it took a global crisis for this to happen!

One clear indication of the power of technology came with CPI Trade Media’s first

July-August 2020 | MEConstructionNews.com

ever Virtual Value Engineering Summit. Held from June 28 to July 1, the completely online event was our first attempt at hosting an entire summit online. With panel discussions, presentations and case studies spread over a period of four days, it was a resounding success with fantastic user engagement throughout.

With more than 1,500 viewers, the virtual summit showed that despite the challenges facing our industry, there is still a hunger to learn and communicate with like minded individuals, so that we can work together to find a way out of the difficult situations that we face.

As such, we’re continuing to explore various methods of delivering content to you in a digitally enabled manner. Our virtual summits and Expert Voice webinars are just two ways we’re looking to engage with our audience in a different manner, so do stay tuned to see what’s in the pipeline.

Evolving and adapting is a key theme of this month’s issue, so I do hope you’ll enjoy the interviews and features in this month’s issue.

Stay safe, and remember to keep following social distancing protocols.

Gavin Davids

GROUP EDITOR gavin.davids@cpitrademedia.com @MECN_Gavin MEConstructionNews me-construction-news

CELEBRATING 25 YEARS IN THE UAE VIEW OUR STORY ON

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BIG PROJECT ME HEARS HOW VOLTAS LIMITED’S VALUES AND PRINCIPLES ARE GUIDING IT THROUGH A CHALLENGING MARKET ON THE COVER

Big Project ME speaks to AR Suresh Kumar of Voltas Limited about how the Indian MEP giant’s distinctive way of doing business is helping navigate its way through crisis MEConstructionNews.com @meconstructionn MEConstructionNews me-construction-news

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The publisher of this magazine has made every effort to ensure the content is accurate on the date of publication. The opinions and views expressed in the articles do not necessarily reflect the publisher and editor. The published material, adverts, editorials and all other content are published in good faith. No part of this publication or any part of the contents thereof may be reproduced, stored or transmitted in any form without the permission of the publisher in writing. Publication licensed by Dubai Development Authority to CPI Trade Publishing FZ LLC. Printed by Al Salam Printing Press LLC. CPI Trade Media. PO Box 13700, Dubai, UAE. +971 4 375 5470 cpitrademedia.com © Copyright 2020. All rights reserved.

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6

ONLINE

MOST POPULAR

FEATURED

CONSTRUCTION

READERS’ COMMENTS

DOOSAN’S NEW XITECLOUD TO AID DRIVE TOWARDS AUTONOMOUS JOB-SITES

Al Mouj Muscat begins construction works on Juman Two apartments

Does anyone remember the story from a few years ago, where people were openly discussing a future where drones and robots would build be able to build our buildings? It

CONSTRUCTION

seemed like crazy talk

Ministry of Infrastructure Development announces $66m worth of projects in Sharjah

then and it probably still is now. This story Doosan’s new XiteCloud smart construction

Analysis: The next generation of workers to improve efficiency of construction

solution to aid drive towards autonomous job-sites - however, does demonstrate that we are moving into

CONSTRUCTION

an era of autonomous

Work completed on 8,500sqm SSAM facility in Al Ain, Mubadala says

equipment operating on our construction sites.

Personally, I’m excited to see what the use of drone technology can deliver in terms of surveying, especially when it comes to mapping out earthworks zones on-site. I’m not sure

MACHINERY

how far the technology

UNEC finds success with used Cat equipment from Al-Bahar

can feasibly go, but if we are to see true levels of autonomous vehicles and equipment deployed then data gathering will be at its heart. As they say information is power and this will be true for both

CONSULTANT

KSA’s Amlak International sets price range for IPO offering

Feature: How the UAE supports housing projects despite COVID-19 pandemic

July-August 2020 | MEConstructionNews.com

client and contractor.

Name withheld by request

SYSTEMS AND MATERIALS FOR REPAIRING, SKIMMING AND PROTECTING CONCRETE

A durable, sustainable structure can only be achieved by thinking in terms of systems rather than products, which is why, year in year out, the building line by Mapei is extended by introducing new, cutting-edge systems and materials with the aim of supplying solutions for every type of problem encountered on site.

Learn more on www.mapei.ae

8

THE BRIEFING

Remote working

The New Normal MIDDLE EAST

Dustin Parkman, VP, Project Delivery for Bentley, speaks to Big Project ME about why the US tech giant decided to waive subscription fees for its ProjectWise 365 cloud service from April to September 2020, and how this step will influence remote working positively July-August 2020 | MEConstructionNews.com

I

n April 2020, in the wake of the ongoing COVID-19 pandemic, Bentley Systems, the global provider of comprehensive software and digital twins services, announced that it was opening up its ProjectWise 365 cloud service, including waiving subscription fees through to September 30, 2020, as part of its efforts to virtually connect infrastructure project participants forced to work from home.

Leveraging Microsoft365 technology and office productivity tools, ProjectWise 365 extends the reach and accessibility of BIM and infrastructure engineering data to facilitate collaboration and design review across the ecosystem of project stakeholders.

As an “instant-on” cloud service accessed through a web browser to simplify design review, transmittals, RFIs, information sharing, and issues resolution, ProjectWise 365 is perfectly suited for quick adoption while working from home, eliminating the need for error-prone combinations of generic technologies such as “drop boxes” and PDF, Bentley Systems says.

Therefore, Big Project ME spoke to Dustin Parkman, VP, Project Delivery for Bentley, to understand why the tech giant decided to take this step and discuss the benefits he hopes this step will bring, not just to the tech giant, but to the global construction industry as well.

9

How successful has the opening up of the ProjectWise365 service been?

Very successful. To date over 1,000 companies have expressed interest in using ProjectWise 365 on their projects.

With our quick-start program and instant-on cloud access, organizations and project teams can immediately use and benefit from the service. ProjectWise 365 gives project teams an easy way to store, access, and share project information as well as to mark-up PDFs for collaborative design reviews complete with comprehensive issues tracking.

Further, these same users can eliminate email-based workflows and manage contractual exchanges including transmittals, RFIs, and general correspondence. With comprehensive reporting, project teams will gain insights into these deliverables and ensure timely responses. ProjectWise 365 helps the entire project team increase efficiency, reduce errors, and save time creating and responding to contractual deliverables.

What feedback have you been getting from customers utilising the service? How has it helped them?

Quick adoption As an ‘instant-on’ cloud service accessed through a web browser, ProjectWise 365 is perfectly suited for quick adoption.

1,000

Number of companies interested in the cloud service

The feedback has been positive.

ProjectWise 365 is extremely easy to learn and use. Project teams can maintain productivity with quick access to the latest project documentation and continue their on-going collaboration with the entire project team regardless of location.

With ProjectWise 365, these organisations and their teams quickly made the adjustment in this new workfrom-home environment, which can potentially save hours that can be lost when using other solutions that require more complicated IT configuration and setup. These customers and their project teams not only see the value of instant-on cloud solutions in times like these but have the confidence to use ProjectWise 365 on future projects.

With technology like ProjectWise 365, the industry recognises the benefit not only during a crisis, but long-term as well” is helping engineering and construction companies, and their supply chains easily transition their projects to the cloud for immediate access to their models, documents, and data from their entire project teams while working from home.

Important features in ProjectWise 365, like issue tracking, and RFIs allow engineering and construction teams to not only immediately share their documents, but post and communicate important information to the entire team so that work can continue without interruption.

How will the utilisation of construction technology during this crisis impact the way construction companies operate in the future?

Engineering and construction companies can only benefit from what they learned during this crisis. Construction projects tend to have a large expanded supply chain, which can make it difficult to ensure that all team members have immediate access to the latest and most accurate information.

Will we see more remote working and digitisation as a result?

Without a question, remote working will likely continue resulting in a new norm, with a mix of office and remote environments.

With technology like ProjectWise 365, the industry recognises the benefit not only during a crisis, but long-term as well, including the ability to share their work more efficiently, perform collaborative reviews, address project issues, track project metrics, and create deliverables on future projects with ease independent of their location.

This recent experience will provide more companies with the confidence that they can not only be successful, but can increase the overall performance of their projects by breaking down some of the barriers in the past to include a more expanded and diverse project team.

How has technology helped construction companies ride out the COVID-19 storm?

Many industries, including engineering and construction, were forced to find new technologies to help them adjust to this new way of working. ProjectWise 365 MEConstructionNews.com | July-August 2020

10

THE BRIEFING

Preparing for AI MIDDLE EAST

Bernard Roux, CEO, Thales in the UAE, discusses the impact artificial intelligence will have on developing and achieving the Arab World’s smart city ambitions

July-August 2020 | MEConstructionNews.com

A

rtificial Intelligence is the defining technological revolution of our century, impacting all sectors, all fields, all of humanity and modern society. The pace of development has been so rapid that the very conception of AI is constantly evolving and being challenged.

AI can already provide real-time measurement of stress and fatigue, and behavioural biometrics – the way you walk, talk or even type on your phone – are increasingly being used by financial institutions to detect and prevent fraud.

As the world around us becomes increasingly connected, the boundaries of the possible are being constantly pushed back.

For example, research from Gartner predicts that 10% of personal devices will have emotion AI capabilities, such as wearables that are able to monitor a person’s mental health by just 2022.

The biggest hurdle behavioural and emotion AI must overcome before it becomes mainstream is that people are uncomfortable with it.

AI is often popularised in fiction as an existential threat - the notion of machines rising against humans – leading us to mistrust it.

So, it is essential that developers work to ensure systems are transparent, understandable and ethical, where users can see the data used to arrive at a conclusion, can explain and justify the results and ensure that it follows objective

11

Creating efficiency Smart devices and buildings not only create efficiencies in the workforce, but they also reduce environmental and monetary waste.

2031

Zayed Smart City is part of the UAE’s AI Strategy 2031

standards protocols, laws, and human rights. We call this TrUE AI (Transparent, Understandable and Ethical).

Artificial Intelligence, coupled with the powerful processing and huge data stores that we now have, is excellent at recognising patterns and extracting information that would otherwise be hidden form human eyes. The challenge is to think widely enough to exploit the technology where it can make the greatest positive changes.

For example, facial recognition programs, powered by AI, will eliminate all issues related to physical fare media, such as loss and theft.

AI could also improve the environmental performance of the transport sector by optimising movements to improve energy consumption during operation. For example, all of Dubai’s metro system is completely automated and driverless.

Technology like this was unthinkable just a couple of decades ago, and artificial intelligence has quietly evolved from being aspirational to commonplace to being truly indispensable.

The digital transformation occurring in all parts of our lives has also brought many benefits to the office environment that we now couldn’t imagine living without.

Digital office assistants can, for example, tell you which meeting rooms are free, control conference room equipment settings and order supplies based on the frequency of your order history.

Smart buildings and smart desks can not only help create efficiencies in the workforce, but they can also cut down environmental and monetary costs for businesses.

The opportunities of the application of AI in both our personal and professional lives are endless. People have not only been open and accepting of the changes, they have been engaging in the technologies, making them smarter and even more useful.

The use of AI has accelerated significantly recently, not just across the UAE but globally, in a bid to slow down the spread of COVID-19.

For example, some countries are rolling out chatbots that help screen potential cases and surface treatments by centralising research data.

The same drivers that have moved companies toward digitalization – connectivity, machine learning, cloud, secure identity and so on – will move cities toward it too” Indeed, the use of data and AI can potentially transform the Arab world’s urban hubs into digitally enabled smart cities. The same drivers that have moved companies toward digitalisation – connectivity, machine learning, cloud, secure identity and so on – will move cities toward it too.

For example, Zayed Smart City Project, launched in 2018 as part of the UAE AI Strategy 2031 aims to harness emerging technologies such as Artificial Intelligence to add intelligence to urban infrastructure and municipal service, and better the lives of UAE citizens.

We are all relying on artificial intelligence to improve decisionmaking, save lives and make the world

a safer, cleaner and friendlier for us all.

Having said that, the current state of AI leaves room for a number of problems to be solved in order to continue its effective use. One of these is an extreme shortage of cybersecurity professionals.

In an effort to make up for lack of personnel, many companies are turning to Artificial Intelligence as a sort of multi-functional pocket-knife to better defend their networks. This coupled with companies setting AI thresholds too high or too low can impact the effectiveness of AI. False positives and negatives can waste the better part of a security analyst’s day.

In 2020, having an Artificial Intelligence program smart enough to recognize what is a real threat and what is just background noise, will be the real test.

However, as with any application of AI, humans must choose how much room for manoeuvre they’re prepared to give the technology. Artificial intelligence (AI), like any other technology, is neither good nor bad — it all depends how people use it. The role of AI in cybersecurity is a good example: hackers use it to do harm, cybersecurity experts use it to help thwart their attacks.

The new possibilities created by AI are defined not by software and hardware, or numbers and data. They will instead be defined by how they help people lead better, happier and safer lives.

MEConstructionNews.com | July-August 2020

12

THE BIG PICTURE

01 SPAIN

03 GERMANY

ACCIONA becomes world’s largest motosharing operator

Exactal rebrands to RIB and revamps product range

ACCIONA says it has increased its network of electric motorcycles to 10,000 units, making it the world’s largest motosharing operator by number of vehicles.

The firm’s shared transport service operates in Madrid, Barcelona, Valencia, Seville, Zaragoza, Lisbon, Milan and has been recently launched as well in Rome, deploying an initial fleet of 500 vehicles.

Since its launch in October 2018, ACCIONA’s mobility service has prevented the emission of 1,000 tonnes of CO2 into the atmosphere, the equivalent of the amount that 100,000 cars generate in one day.

02 GERMANY

Liebherr begins sales of self-service concrete plant Liebherr has started sales of its new selfservice concrete plant which is designed to help building material suppliers extend their range of services and supply their customers in a more flexible manner.

According a statement from Liebherr, the new plant enables smoother supply of different types of concrete to endcustomers in a time-saving manner and incorporates independent weighing of the individual components for a high output rate of up to 30cbm/hour.

Using the new self-service plant, suppliers are able to serve a wide range of customers.

Exactal says its rebranding to RIB, conducted with a revamp of its product range will clarify the company’s ‘position and messaging to the market’.

In a statement, the company said the CostX estimating platform has been renamed to iTWO costX, while CostX Benchmark is now known as iTWO benchmark. iTWO refers to RIB Software’s flagship cloud-based platform, which provides the world’s first enterprise cloud technology based on 5D BIM with AI integration for construction industries.

04 TURKEY

06 EGYPT

Marr Contracting completes world record lift for Turkey’s 1915 Çanakkale Bridge

Palm Hills announces $215m mixed-use development

Marr Contracting, an Australian-based heavy lifting tower crane specialist, has announced that it has completed a world-record lift during the construction of the 1915 Çanakkale Bridge in Turkey.

In a statement, Marr said that the recordbreaking construction feat saw one of Marr’s M2480D Heavy Lift Luffers (HLL) undertake the world’s heaviest (155 tonnes) at height (318 metres) craneage lift on what will be the world’s longest span suspension bridge.

The European side was completed 24 hours later, the statement added.

July-August 2020 | MEConstructionNews.com

05 JORDAN

Yellow Door Energy commissions 1.2MWp solar park for Jordan’s Jabri Restaurant Yellow Door Energy has commissioned a 1.2 megawatt-peak (MWp) solar park for Jabri Restaurant in Al-Salt, Jordan The solar park covers an area of 22,000sqm and will generate 2,145 megawatt-hours of clean energy in the first year of operation. The sustainable energy provider said that this will reduce carbon emissions by 1,500t and meet over 70% of Jabri Restaurant’s annual energy needs.

The solar park operates under a build-own-operate-transfer (BOOT) wheeling agreement.

Palm Hills Development has inked a co-development and revenue sharing agreement with Al Shorouk for Touristic Developments for a new $215 million mixed-use community in the Ain Sokhna region of Egypt.

As per the deal, Palm Hills will be responsible for all work related to construction, development, infrastructure, marketing and sales activities.

The project will occupy an area of 487,200sqm and is located on the Red Sea. It will be developed in five phases and will feature 1,201 residential units.

THE BIG PICTURE

13

02 03

01

04

05 06 08

07

09

08 SAUDI ARABIA

07 SAUDI ARABIA

DGDA begins work on $20bn Diriyah Gate project The Diriyah Gate Development Authority (DGDA) has broken ground on the first phase of the $20bn Diriyah Gate gigaproject. As part of phase one, the existing Bujairi district will receive a major upgrade in terms of beautification and infrastructure, which will enhance quality of life of the community.

Diriyah Gate is a mixed-use cultural and heritage development and will showcase 300-plus years of authentic history by delivering heritage experiences, empowering education, entertainment, shopping and dining.

Amaala appoints Foster + Partners to design destination’s international airport Amaala, the high-end luxury destination located along Saudi Arabia’s northwestern coast, has announced that a design by the UK-based architectural and design firm Foster + Partners has been chosen for its new international airport.

In a statement, Amaala said that the airport design by Foster + Partners is inspired by the optical illusion of a desert mirage. The firm conceptualised the terminal and control tower design, while the airport masterplan has been designed by Egis.

09 SAUDI ARABIA

JLL strengthens GCC healthcare offerings as investor interest rises Following high-profile advisory project wins in Saudi Arabia and across the region, JLL has announced that it has strengthened its healthcare offering.

JLL’s healthcare team recently advised on a partnership between Al Murjan Group, and Mediclinic Middle East for the establishment of a private hospital with 200 beds in Jeddah.

JLL is growing its offering to respond to upcoming PPP projects in KSA, UAE and Oman, as it believes that these projects will attract interest from in international healthcare operators looking to partner with local investors and developers.

MEConstructionNews.com | July-August 2020

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THE BIG PICTURE

17

18 10

11 13 15

12 14 16

10 BAHRAIN

12 UNITED ARAB EMIRATES

King Fahd Causeway likely to open

by July end

RTA carries out intensive maintenance on Dubai Metro network

The King Fahd Causeway connecting Saudi Arabia and Bahrain is likely to reopen by the end of July.

Asharq Al-Awsat newspaper reported that a meeting of the Bahrain Coordination Committee disclosed the possibility of reopening of the bridge on July 27. It added that the opening plans will include strict protocols to limit the spread of coronavirus.

The 25km long causeway was closed on March 7, 2020 as part of precautionary protocols to control the spread of the COVID-19 pandemic.

July-August 2020 | MEConstructionNews.com

11 UNITED ARAB EMIRATES

Ecolog and Siemens Energy’s Water Solutions join forces Ecolog International and Siemens Energy’s Water Solutions business are working together to provide an efficient and serviceoriented treatment option for the water and industrial wastewater industry. Industrial wastewater is a rapidly growing waste stream of downstream and energy industries, which has adversely impacted the environment and water resources over the last century.

The integration of Siemens’ Zimpro Wet Air Oxidation and PACT biological treatment solutions, as part of the overall services provided by Ecolog, will lead to greater efficiency and local value add.

The RTA’s Rail Agency capitalised on the lockdown period of the National Disinfection Programme by carrying out intensive maintenance works on the Dubai Metro network.

Teams carried out key maintenance activities of some parts of the metro railways in a record time equal to 50% shorter than the planned period. Preventive maintenance works on nine railway curves, vis-à-vis planned five curves, were also carried out, a completion rate of 180%.

Also completed was the preventive maintenance of rail pads.

THE BIG PICTURE

15

14 UNITED ARAB EMIRATES

Dubai Municipality and DSOA ink deal for geospatial data 13 UNITED ARAB EMIRATES

SEWA completes 305km natural gas network in Rahmaniyah A 305km natural gas network in Rahmaniyah has been completed by the Sharjah Electricity and Water Authority (SEWA). The total length of the network in Sharjah is now 1,750km.

SEWA is working on implementing a strategic 16km line from the Rahmaniyah station to the Muwailih commercial area. The line will serve the region including development projects such as Al Waha, Nasma, Al Zahia.

The utility company aims to deliver services to the people of the Rahmaniyah area, taking advantage of the natural gas pumping station.

The Dubai Silicon Oasis Authority (DSOA) has signed a MoU with the Geographic Information Systems (GIS) Centre of Dubai Municipality.

The collaboration aims to enhance geospatial infrastructure development to accelerate digital transformation.

The MoU grants DSOA access to the interactive planning and survey mapping of Dubai, provided by the GIS Centre at Dubai Municipality. DSOA will acquire geographical data in addition to other specialised systems, smart applications and three-dimensional models of geospatial data.

15 UNITED ARAB EMIRATES

$114m Al Taif Business Centre project in Fujairah reaches 85% completion Al Taif Investment, the Fujairah-based joint venture between Dubai Investments and Fujairah Investment Establishment, has announced that 85% of work has been completed on its new mixed-use retail, hospitality and residential project, Al Taif Business Centre, and that the project is due for handover by the end of 2020.

The $114 million project has a total built-up area of 96,400sqm and consists of two towers – hotel plus residential tower with basement + ground floor + 19 floors and an office tower.

17 UZBEKISTAN

Masdar to develop 500MW wind farm in Uzbekistan 16 OMAN

Al Mouj Muscat begins construction work on Juman Two apartments

Al Mouj Muscat has begun initial construction works at its marina facing Juman Two apartment project.

The move follows the completion of ground-breaking and piling works.

Located on the Al Mouj Muscat oceanfront, Juman Two consists of 152 one- and two-bedroom living spaces.

Al Mouj Muscat is a public-private venture between UAE-based Majid Al Futtaim Properties and Oman’s tourism development company, Omran, and investments development company Tanmia.

Following the signing of a deal with Uzbekistan’s Ministry of Investments and Foreign Trade and JSC National Electric Grid, Masdar has announced it will design, finance, build and operate a 500MW utility-scale wind farm in the country.

The project will take shape in the Zarafshon district of the Navoi Region and is expected to begin commercial operations in 2024.

Masdar and Uzbekistani government representatives signed a Power Purchase Agreement (PPA) and Investment Agreement for the project.

18 CHINA

Zoomlion announces ‘world-first’ all electric truck crane Equipment major Zoomlion says its new ZTC250N-EV, the first unit of which rolled off the production line at its plant in Quantang Industrial Park in Changsha, China, is the world’s first “pure electric powered truck crane”.

The truck crane uses a five-section boom and has a three-axle chassis.

Zoomlion said it can reach a maximum speed of 90km/h and has a maximum gradeability of 50%. The ZTC250N-EV can deliver over 260km of range powered by its high-density lithium iron phosphate battery pack.

MEConstructionNews.com | July-August 2020

16

MARKET REPORT

Industry outlook

Dubai real estate market shaken by COVID-19 and oil slump UNITED ARAB EMIRATES

KPMG report says real estate and hospitality sectors expected to survive current pandemic despite significant challenges

D

ubai’s real estate sector is facing significant challenges in the current environment. While demand may be temporarily saturated, government and industry stakeholder incentives are keeping investors engaged and many developers intend to continue projects as originally planned.

Residential supply continues to grow, despite softening market conditions. While

July-August 2020 | MEConstructionNews.com

total residential supply in the emirate was forecast to reach 671,000 units by 2021, the pandemic may affect deliveries.

Prices are expected to remain soft through 2020 due to COVID-19, with Dubai remaining a buyers’ and renters’ market.

Despite transactions being disrupted at the end of Q1 2020, attractive prices and terms may prompt residents and stakeholders to explore investment opportunities. Future handovers, however, may be impacted by the duration of the pandemic, buyer sentiment, easing of restrictions and supply chain issues.

As remote work becomes part of postCOVID-19 corporate culture, office space requirements are expected to shrink, while Dubai’s commercial gross leasable area (GLA) is forecast to increase to 9.18 million square meters by 2021. Commercial real estate may see a churn with some tenants seeking new commercial spaces offering quality at a competitive rent.

However, relocations are likely to dominate – rather than additional office leasing

space – in the short to medium term.

Travel restrictions shrunk average occupancy in May to 27.7%, a year-onyear decline of 46.1%. With recovery dependent upon international and local travel restrictions and traveller sentiment, Dubai hotel operators believe their FY 2020 revenue may contract by more than 50% and anticipate it will take 18-24 months to reach pre-pandemic levels of profitability.

The UAE’s brick-and-mortar retail, especially malls, were directly impacted by the pandemic – particularly food and beverage (F&B) outlets, high-end retailers, and entertainment venues. Businesses that successfully adopted e-commerce options are staying connected to their consumer base, with grocery stores and pharmacies witnessing an uptick in online sales. Companies which had not previously invested in technology are forced by the pandemic to re-evaluate their IT strategy. Digital transformation does not seem to be an option – it has become a critical business need.

MARKET REPORT

CURRENT AND FUTURE RESIDENTIAL STOCK (000’S)

17

NUMBER OF RESIDENTIAL TRANSCATIONS READY SALES

OFF-PLAN SALES

50,000 40,000 30,000

519 555 638 670

2019

2018

2017

2016

2015

10,000

2021

2014

2020

2013

2019

2012

2018

20,000

Residential prices are expected to remain soft through 2020 due to COVID-19, with Dubai remaining a buyers’ and renters’ market” NUMBER OF REAL ESTATE TRANSACTIONS IN DUBAI 5,000 4,000 3,000 2,000

9.25

4

9.00

June 20

May 20

April 20

March 20

February 20

8.50

2021

2020

2019

2018

8.25 2017

2021

2020

2019

2018

2017

1

Dubai hotel occupancy in May 2020 - a 46.1% Y-o-Y decline

2016

2

8.75

2015

27.7%

3

2016

January 20

December 19

DUBAI COMMERCIAL WORKING SPACE GLA (M 2 MILLIONS)

5

2015

Source: Post-pandemic plans for concrete recovery by KPMG

DUBAI SHOPPING MALL GLA (M 2 MILLIONS)

November 19

October 19

September 19

August 19

July 19

June 19

May 19

April 19

March 19

February 19

January 19

1,000

MEConstructionNews.com | July-August 2020

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ANALYSIS

Dispute resolution

Streamlining dispute resolution is the way forward

MIDDLE EAST

Juan Sáez and Richard Scott from Accuracy warn that construction companies need to avoid burdensome dispute process and apply pragmatism before its too late

I

f you are expecting an article that points at COVID-19 for the troubles in the Middle East construction market, this is not it. Even before COVID-19 emerged, contractors had little wiggle room to absorb even moderate levels of risk, with the region already a petri-dish for international companies engaged in a dangerous contest to deliver more projects at often razor-thin margins.

But it is fair to say that COVID-19 could not have been less timely. The projects market in the largest countries in the region had already begun shifting away from the private sector to governmentbacked infrastructure schemes, driven by an oversupplied real estate market.

Throw into the mix the mounting pressure on government spending

July-August 2020 | MEConstructionNews.com

Rising concerns The adversarial nature of construction contracts and the lack of cash flow could trigger a new wave of disputes within the regional industry.

50%

New project awards in the region are down by 50% y-o-y

this year thanks to lower oil prices and COVID-19, and there is no surprise that this explosive cocktail is at the top of the agenda for many decision-makers within governments, ministries and authorities.

New project awards in the region are down by over 50% year-on-year.

As lockdown measures relax in the Middle East and abroad, supply chain disruptions continue to materialise, placing contractors in a testing position.

“The adversarial nature of many construction contracts and the current lack of cash flow is a perilous recipe that is triggering a new wave of disputes between owners, main contractors and subcontractors,” says Juan Sáez, director in Dubai with consulting firm Accuracy.

Contractors are becoming impatient

ANALYSIS

and notices of claim are being issued daily, degrading many already tense relationships between contracted parties. As distrust mounts, parties are equipping themselves with lawyers and experts in anticipation of disputes.

Yet it does not stop at claims. In the UAE, long thought of as a rolemodel in the Middle East construction market, more severe consequences are materialising, including owners calling bonds, contracts being terminated, and joint venture partners being abandoned and left with unexpected financial burdens.

In this gloomy context, many are in for a long ride. Sáez highlights the sheer cost and time consequences of triggering formal disputes: years of costly proceedings and uncertain liabilities on everyone’s balance sheets.

Changing the inclination of owners and contractors to go into battle in a formal dispute is certainly no mean feat. It stems from claims processes.

“The paradigm with construction claims is that contracts do not clearly indicate how delay and quantum claims should be presented or substantiated.

So, contractors seek to maximise their claims, expecting them to be partly rejected. Although they may have indeed suffered delay or cost overruns, the claims put forward are not auditable and make it easy for clients to reject them.

The reality is that poorly substantiated claims are the norm in the Middle East, and I’m afraid this is still the case on claims arising from COVID-19,” Sáez comments, pointing out that the severity of the current situation warrants looking past these historical patterns.

“We are working with project owners and contractors in the region to foster a streamlined approach to the burdensome dispute process. It is about implementing pragmatic contract processes that are effective in avoiding unnecessary noise,” says Richard Scott, partner.

“More than ever, now is the time to treat construction contracts as living and breathing documents that focus on the successful delivery of projects whilst maintaining the financial equilibrium between parties.”

“The successes we have seen are down to getting contractors and owners

19

More than ever, now is the time to treat construction contracts as living and breathing documents that focus on the successful delivery of projects whilst maintaining the financial equilibrium between parties” A long ride Juan Sáez says that triggering formal disputes will result in years of costly proceedings and uncertain liabilities for all stakeholders.

Cash concerns On live contracts, cash flow is a prime concern for contractors, and it can be eased by negotiating more timely payment returns.

to speak the same language when it comes to understanding the causes of project overruns,” Sáez adds.

Such a streamlined approach requires parties to unlock horns and adopt a different mindset. Scott says.

“Project owners need to look at the big picture, focus on project delivery and understand the repercussions of these disputes on their organisation’s goals.”

In practice, that requires parties to stand back from already entrenched positions on existing contracts and thinking differently about future contracts.

“On live contracts, cash flow is currently a prime concern for contractors, and this can be eased by negotiating

more timely payment terms, releasing retentions, reducing performance bonds. For project owners, there are a number of collaborative solutions to reduce costs such as targeted de-scoping, value engineering or more forwardlooking profit-sharing mechanisms on an open book basis,” says Sáez.

In the longer term, if the Middle East is to hold on to its reputation as the centre of some of the most iconic projects on the Planet, it will need to continue to attract sophisticated contractors. That hinges on project owners fixing the gaps in the claims and disputes processes that are driving so much anxiety in the current market.

MEConstructionNews.com | July-August 2020

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IN PROFILE

AR Suresh Kumar

“You have to innovate, find new processes, new tools and techniques. That’s what’s going to get you out of this market [situation]” BIG PROJECT ME SPEAKS TO AR SURESH KUMAR, VICE PRESIDENT AND HEAD OF THE INTERNATIONAL OPERATIONS BUSINESS GROUP FOR VOLTAS, ABOUT WHY HE BELIEVES THE INDIAN MEP GIANT WILL CONTINUE TO THRIVE IN A CHALLENGING CONSTRUCTION LANDSCAPE | MEConstructionNews.com | MEConstructionNews.com March 2020 2020 July-August

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MEConstructionNews.com | July-August 2020

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IN PROFILE

With honest and straightforward business principles, close and careful attention to details, and the ability to take advantage of favourable opportunities and circumstances, there is a scope for success.”

These words come from a quote attributed to Jamsetji Tata, the man regarded as the ‘Father of Indian Industry’, and the founder of what would go on to become the Tata Group of Companies, one of India’s largest conglomerates, with a history going back more than 150 years.

Even in the year 2020, Tata’s words continue to ring true, and their echoes can be heard in the way the group’s subsidiaries operate and carry out business.

Nowhere is this more evident than Voltas Limited, India’s largest air conditioning company and one of the most reputed engineering solution providers in the country, if not all of South-East Asia and the Middle East.

Created more than six decades ago when the Swiss-based Volkart Brothers joined forces with Tata Sons Limited, the company specialises in project management, and has played a vital role

Anchor location Voltas has set up its international headquarters in Dubai to allow it to serve its various markets faster and more efficiently, says Suresh Kumar.

150

Number of years the Tata Group has existed

in developing India’s infrastructure, while also exporting its expertise across technology, engineering, construction, cooling and ventilation, infrastructure projects and many more sectors, to countries around the world.

As the COVID-19 pandemic continues to sweep across the world, Big Project ME caught up with AR Suresh Kumar, vice president and head of the International Operations Business Group for Voltas, to discuss how the company is adapting to the new normal, while continuing to thrive and grow its business despite the many challenges facing the industry, both regionally and internationally.

“We operate throughout the GCC, in UAE, Qatar, Oman, Bahrain and Saudi Arabia, while in the Far East, we have our operations in Singapore.

We’re also licensed to operate in Hong Kong and Macau. Overall, if you look outside India, Voltas operates in almost 40 countries, and over the last 40 years, we’ve done a lot of jobs in Russia, the Central Asian countries, in Mauritius and so on,” says Kumar, speaking during a video conference call from his offices in Dubai.

“These jobs were off the back of us being an Indian company and having a reputation of being willing to work; but over the last 15 to 20 years, we’ve transformed into an international company. We’ve strategically located our international headquarters in Dubai, so that it becomes an anchoring space, where we can fly out to the world. It’s faster, and plus it helps you understand the psyche of the customer.

“In the 1970s and 1980s, Indian companies were approached by Middle Eastern owners because they wanted a better and more enabled project, and culturally, we were together, while our prices were also slightly lower compared to a European contractor. Today however, that’s not the philosophy. Today, everyone is at par and there’s no tags against you,” he relates, adding that Voltas’ longevity sees it regarded as a locally grown company by clients.

With honest and straightforward business principles, close and careful attention to details, and the ability to take advantage of favourable opportunities and circumstances, there is a scope for success” July-August 2020 | MEConstructionNews.com

IN PROFILE

With operations primarily in the MEP sector, the company has slowly diversified its interests, with operations in Oman including a landscape and irrigation company.

Furthermore, the company has developed its other offerings, with its water treatment and related services division flourishing in Singapore and the Far East.

Kumar reveals that in addition to these endeavours, Voltas has also gone into the solar market in a limited way, while it is also exploring the industry waste processing sector, having recently successfully completed a major project that involved the setting up of a biogas plant in Oman.

“Our journey is towards those things that the customer wants, where we can serve our customers with MEP solutions, not just in the built environment, but for whatever solutions the customer wants or needs.”

The company has more than 4,400 staff employed outside of India, from Singapore to Saudi Arabia. It also operates a small engineering cell in Mumbai, which consists of around 60 to 70 people acting as backup for the overseas teams, in case there’s a sudden need for engineering on a project, Kumar adds.

“We are doing well, overall,” he says.

“Last year’s financial results, we did well in the top and bottom line. We’ve

4,400

Number of staff employed

by Voltas outside India Serving customers Voltas has branched out its service offerings in order to better serve its customers, depending on their needs.

23

got a very strong presence in India with our unitary products. We’re number one in in the commercial air conditioning business with a 27% market share.

We’ve done extremely well, and we’re a debt free company with very high capital,” he states, pointing out that this strong performance is due to the values and way that Voltas does business, driven by the core philosophies of its parent group.

“We follow a different philosophy when it comes to contracting. We don’t just follow typical practices in the contracting sector. It’s the Tata philosophy, and financially, it’s different [to the norm in the industry].

Irrespective of what is happening

MEConstructionNews.com | July-August 2020

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IN PROFILE

I’m not a believer in survival.

Unfortunately, in contracting, a lot of people use this phrase: ‘We have to somehow survive’.

No, don’t ‘somehow survive’, instead recalibrate yourself”

in the market, we make sure that we’re controlling our financials very well. That approach is something that has taken us in a better way and allowed us to continue our journey without any setbacks,” he explains.

“Let me take you into our criteria of selection for jobs. We have multiple filters that we apply even before tendering. We’re not a company that quotes for every job. We do a lot of tendering filters and have prequalification criteria for clients; we see what is the purpose of the particular project, does the client have the ability to pay, is he going to depend

July-August 2020 | MEConstructionNews.com

Recession proof Voltas’ pipeline of jobs can be considered recession, or even pandemic, proof, says Kumar.

27%

Voltas market share in India

on selling the project to pay us? All of these kinds of issues come into play. We apply a lot of thought, a lot of exercises, before we even tender on a project.

“However, once that is done and we’ve put in all these things, then you have to support the client [if you win the project]. Voltas doesn’t have a history of running away from projects. There are cases where we’ve made mistakes, but we’ve completed the job and come out – there are even jobs where we’ve lost money, but we’ve ensured that the client hasn’t suffered because of our mistakes,” Kumar emphasises.

IN PROFILE

Because of this stringent vetting process, Voltas has managed to select a pipeline of jobs that are recession, or indeed, pandemic proof. Citing their project at Expo 2020 Dubai as an example, Kumar points out that although the Expo has been postponed, the client still intends to finish the project on schedule, as planned.

Similarly, the company is working on a number of district cooling plant projects with reputed agencies, where the projects are scheduled to continue on time and as per the schedule, he says. In fact, he adds, there is a resort client in Bahrain who actually wants Voltas to finish their project ahead of time, as it believes it will be able to benefit from a post-COVID19 surge in business.

“Let’s understand one thing – this pandemic is going to bring a different dimension to the travel industry. A lot of people in the GCC have a habit of traveling out during the summer and winter breaks. Fewer and fewer

LA SE R SCAN NIN G

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We have multiple filters that we apply even before tendering. We’re not a company that quotes for every job. We do a lot of tendering filters and have prequalification criteria for clients” Client support Voltas will often work closely with consultants, clients and main contractors to find better solutions for projects they’re involved in.

people will travel to Europe, America or the Far East for the foreseeable future. But they’ll still have this urge to travel, so where will they go? They’ll travel locally, because they’re more or less safe within the region,” Kumar

predicts. “As borders get opened, I’m very sure that local travel will increase, and with it increasing, hospitality and its related industries will have enough volume. It may not be as much as before, but it will definitely be there.”

UN DE R GR OUND MA P P IN G

B IM

STR UCTUR AL ASSESSME NT

TR AIN IN G / SA LE S

One JLT, Jumeirah Lakes Towers P.O. Box 123422, Dubai - UAE Mob: +971 543 116 793, Pho: +971 4 429 5869 e-mail: admin@gcsolutionsltd.co.uk Web: www.gcsolutionsltd.co.uk

MEConstructionNews.com | July-August 2020

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IN PROFILE

“For Voltas, because we’re in that kind of area, I don’t foresee big trouble for us at the moment. The only thing that I can tell for sure though, is that we’ll have to an another filter to our decision making process – which is to look back at even some of our stronger customers and what their status is.”

Furthermore, Kumar predicts that new opportunities will continue to open up due to the pandemic, particularly for firms like Voltas, which offer a range of services and solutions. One such service is the company’s facilities management business, which he predicts will see a strong growth both during and post the ongoing pandemic.

New opportunities The pandemic will open up opportunities for companies that are agile and offer a wide range of solutions to their clients.

70

Number of engineers in Mumbai serving as backup

July-August 2020 | MEConstructionNews.com

“Definitely, 2020 will open up a lot of opportunities thanks to all these changes. If you see the competition landscape, there are a number of companies who are not going to be able to adjust to this pandemic situation – they’re going to collapse. There are also companies who’ll vacate this market,” he says.

“Another big advantage for us at this time is that we’ve got a reputation for doing things the right way, whether that’s paying salaries on time or whatever – we’re very fair to staff workers, so this pandemic will give us an opportunity to get the best talent in the market, during this crisis. We’ve had crises in in the past – wars, oil

prices, steel prices and copper prices have all gone up and down. Issues have always happened in the past, so why do we say that this is a unique situation? Everything is unique at that particular point in time. So, it comes down to how you see your business and keep your staff intact. That’s what we’re looking at. Keeping people within the fold, so that we’re able to deliver on our projects and make sure our customers don’t suffer. If any customer is to be happy, then first of all, your staff has to be happy. Once your staff feel like they’re being taken care of, then they’ll take care of the company.”

Kumar insists that despite the uncertain situation, smart

IN PROFILE

Our journey is towards those things that the customer wants, where we can serve our customers with MEP solutions, not just in the built environment, but for whatever solutions the customer wants or needs” construction companies need to re-examine their policies and procedures and become more agile and flexible to develop and grow.

“We have to be patient – we cannot rush in and do something. I’m not a believer in survival. Unfortunately, in contracting, a lot of people use this phrase: ‘We have to somehow survive’. No, don’t ‘somehow survive’, instead recalibrate yourself. When I say that, I mean that you have to redefine all your old schools of thought, all the methodologies that you though were excellent – they’re not going to take you further.

“It’s not what you’ve done so far that’s going to take you further. You have to innovate, find new processes, new tools and techniques. That’s what’s going to get you out of this market [situation],” he asserts.

Pointing to Voltas’ work on district cooling plants, Kumar says that while the UAE is probably the capital of the district cooling business in the region, if not the world, there are a number of district cooling projects coming up in Saudi Arabia and Bahrain. While there are intermediate companies in those countries, there are very few contractors capable of managing and delivery projects of such scale and complexity.

“These projects need a lot of talent, and that’s why we’re focusing on talent retention. Plus, when you

keep doing these types of projects, you come up with new methods and techniques, which can involve everything, from civil capabilities, through to MEP capabilities, and through to automation.”

“Today, there are plans that are being developed for Artificial Intelligence, Machine Learning and developing plants that operate without people, and so on.

“You need a lot of knowledge extensions – it’s not just about us being a MEP company anymore.

We have to integrate with big data and understand how it’s used to run a plant, for example.

2020

Will change how the industry operates Knowledge advantage Because Voltas is part of the Tata Group, it can avail of a number of resources within the organisation to resolve challenges encountered on projects.

27

“Our advantage is that because we’re a Tata Group company, we’ve got a lot of other companies that can work with us as required, and vice versa. If I need help with big data on a project, I don’t need to recruit someone. I can just go and search within the Tata organisation.

These kinds of things help,” he says.

In addition to all these changes happening in the industry, Kumar says that customers are finally starting to realise the importance of looking at the financial stability of the companies they partner with on projects. As he explains, due to current economic situation, clients will consider a variety of factors and not just performance and ability to deliver on time. “[They will look at] how strong are the books? How transparent are they? With these factors, Voltas will definitely score points. We’re a debt free company, so banks will be willing to support the project, and clients will know that we won’t divert the money they’re paying us for something else.

“As a contractor, you have to go with clients who are going to buy into you. Don’t waste your time having to go with someone who you’ve got to convince. There are reliable and reputed customers who still want to process their jobs.

“The fundamental issue is that you want a client who’s willing to own a project, rather than someone who’s only interested in selling it,” he concludes.

MEConstructionNews.com | July-August 2020

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July-August 2020 | MEConstructionNews.com

PROJECT PROFILE

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Heriot-Watt University PROJECT NAME: Heriot-Watt University Dubai Campus PROJECT COMMENCEMENT: April 2020 PROJECT COMPLETION: December 2020 PROJECT LAUNCH DATE: January 2021 CURRENT COMPLETION RATE: 17% NUMBER OF FLOORS: 6 + GF

Building on Values BIG PROJECT ME PROFILES THE NEW HERIOT-WATT UNIVERSITY DUBAI CAMPUS IN DUBAI KNOWLEDGE PARK. CURRENTLY IN THE PROCESS OF BEING FITTED OUT BY KHANSAHEB, THE NEW CAMPUS WILL OPEN IN JANUARY 2021 AND IS SET TO PUSH THE REGION’S ACADEMIC LANDSCAPE FORWARDS. GAVIN DAVIDS REPORTS MEConstructionNews.com | July-August 2020

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PROJECT PROFILE

he UAE is regarded as one of the more mature education markets in the GCC region, and has attracted investor interest from some of the most prestigious institutes from around the world, including the likes of New York University in Abu Dhabi, and Heriot-Watt University in Dubai, amongst many others.

Education has long been considered a key element in the GCC’s drive towards economic diversification and sustainable development. The UAE, in particular, has led this charge towards making investment in higher education a key priority. This comes as no surprise, given that the 18-24 population has been projected to grow at a CAGR of around 2% between 2017 and 2021, a PwC Middle East report says.

With recent reforms extending student visas from one year to five years, and introducing a special 10-year for exceptional students, there is clearly an emphasis on attracting top-tier academic talent – an impression backed up the arrival and growth of several high-ranked universities in the country.

These measures are likely to drive up enrolment numbers, with an optimistic scenario being that private enrolment could continue to grow linearly at a CAGR of 3.5%, adding more than 21,000 students by 2021, the report adds.

Although the ongoing COVID-19 pandemic has slowed momentum, universities in the country are banking on enrolment figures resuming their rise, and as such, have begun investing heavily in upgrading and developing their campuses and assets.

One such university is Heriot-Watt University in Dubai, which recently

announced that it had awarded the interior fit-out contract for its new campus in Dubai Knowledge Park to Khansaheb Civil Engineering, the locally owned construction company.

In a statement in June, HeriotWatt said that following a lengthy tender process – which started in 2019 – the university had made the decision to finalise the appointment of Khansaheb in April 2020. The university was assisted and advised in this process by Jones Lang LaSalle (JLL), who have also been appointed as project managers for the project.

“There were several reasons why we decided to move to a new campus.

We made a commitment to this region to continuously deliver high-quality education and research in Dubai and this move to a brand-new campus in 2021 is part of that,” says Professor Ammar Kaka, provost and vice principal of Heriot-Watt University Dubai, to Big Project ME during an exclusive interview about the project.

“This move plays a key role towards our strategy 2025, which is called Shaping Tomorrow Together. It is a values-led strategy that seeks to embed our four guiding values – Inspire, Collaborate, Belong and Celebrate – into everything we do. Focused on our vision for excellence, our mission to benefit society, and our ethos and values, our strategy expresses what we intend to achieve over the next six years, and that includes offering students the best possible experience.

“Heriot-Watt is a globally connected university and has campuses in Scotland and Malaysia, as well as in Dubai, and key to our Strategy 2025 is being a globally connected university, hence the need for a new digitally enabled campus, with suitable spaces to help link students and staff with their peers and stakeholders globally, not just locally,” he explains.

A key part of the student experience at the new campus is that it is based at the heart of Dubai Knowledge Park. By being centrally located in one of the city’s influential business hubs, students will be able to network with the surrounding business community, Kaka adds.

“We also think that our investment in a new campus is proof of our belief

July-August 2020 | MEConstructionNews.com

5,000

Total capacity of students on the new campus

in the economy, even during these unprecedented times. Heriot-Watt can and will help in the economic recovery of Dubai. Not only through our collaborative research initiatives with the business community, but by continuing to attract and develop the best possible talent in the UAE. We expect to see a full recover post-COVID and our investment in the new campus has been made in view of the same,” he states confidently.

PROJECT PROFILE

A MODERN FACILITY:

The new campus is set to further enhance the student experience through a digitally enabled learning environment that supports the delivery of the University’s portfolio of programmes, which includes Data Science, Computing and AI, Business, Accounting and Finance, as well as Psychology, Architecture and Design, Construction and Engineering.

It will offer students exciting new features, such as a dedicated student hub, significantly more social learning spaces, an engaging library with study spaces, a Maths Gym for Maths support, and a central Student Services Centre for student administration.

Classrooms have been designed to be more interactive, where rather than traditional lecture theatres, there will be two collaborative lecture

World-class experience The new campus will offer students a world-class, interactive learning experience.

31

theatres supporting small group work, as well as whole class teaching.

Kaka adds that considerably more space will be allocated for doctoral students and research fellows than currently available. The new campus will include an in-house recording studio in order to enable and encourage the creation of digital materials, in line with Heriot-Watt’s vision of offering a worldclass interactive learning experience.

MEConstructionNews.com | July-August 2020

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PROJECT PROFILE

“The new campus will also include an Enterprise Floor, similar to what has been developed at our campus in Edinburgh, combining our GRID (Global Research Innovation and Discovery) infrastructure and the business incubators at our Edinburgh Business School. The enterprise floor will allow our staff, researchers and students the opportunity to interact and work with business leaders and entrepreneurs,” he says.

“Furthermore, Heriot-Watt University has recently committed to a multimillion-pound investment in robotics infrastructure and research in Edinburgh.

In Dubai, we are delighted to announce that we are launching a degree in robotics and our new campus will include a state-of-the-art robotarium as part of its mechanical engineering laboratory.

“The entire design has been planned bearing in mind that the education landscape is dynamic and constantly evolving. For example, we believe that learning is likely to have a blended approach so have ensured the new campus will support that effectively,” he asserts.

By moving to a bigger facility, HeriotWatt will be able to accommodate a student population of 5,000, and due to the campus being much larger, Kaka hopes students will have more capacity to network, engage in innovative projects, problem solve and work in teams.

Our investment in a new campus is proof of our belief in the economy, even during these unprecedented times.

Heriot-Watt can and will help in the economic recovery of Dubai, and develop the best possible talent in the UAE” Blended approach Professor Ammar Kaka says that the new campus has been planned bearing in mind the changing dynamics of the education landscape.

240

Number of people working onsite currently

July-August 2020 | MEConstructionNews.com

DELIVERING THE CAMPUS

In order to deliver such a vital project, Heriot-Watt turned to Khansaheb, one of the most venerable names in the UAE construction industry. With a rich heritage and a reputation for delivering similar projects on time, within budget and consistently meeting key deliverables set, awarding the contractor the project was an easy decision for the university, Kaka says.

“As part of the tendering process, they were able to demonstrate that they have successfully delivered largescale, bespoke design projects; and as a locally owned company, they have the knowledge and context of how to

work efficiently in the region. They also demonstrated their ongoing commitment to the health, safety and wellbeing of their employees, which was a key factor during the procurement process.

“The deliverables Heriot-Watt tasked Khansaheb with cover on-time completion, Health and Safety and Quality Assurance. All the deliverables will be benchmarked against stringent performance indicators,” he points out.

With the project commencing work on site in April 2020 and progressing well, in line with the Contract Programme, Ross Trivett, Khansaheb Interiors general manager tells Big Project ME that work is currently 17% complete, and that overall completion is scheduled for December this year.

“The client required a technically strong contractor who could deliver a high-quality product, on time, working in a collaborative, proactive and innovative manner to ensure that the project was executed successfully, while at the same time creating an enjoyable, ‘can-do’ working environment,” he says.

“Due to the current situation, several staff have been working from home during the engineering phase of the project, and this has proven to be challenging as normally workshops would be adopted with all key stakeholders, so as to fast track the required approvals.

“From a construction viewpoint, as the building is shell and core and has only recently been completed and begun

PROJECT PROFILE

commissioning, snagging is ongoing.

We have faced some challenges with handover procedures for the Service/ Front of House lifts and isolation of the existing services to allow demolition works to commence in certain areas. We have overcome these initial challenges and the construction works are now rapidly progressing,” Trivett outlines.

There are currently just over 240 Khansaheb staff and operatives on site during the day, while the recently commenced night shift has 20 staff members and operatives to expedite the demolition works waste removal, he says.

“At peak during the construction phase, we forecast having between 375 to 400 staff and operatives split between the day and night shift,” he

400

Number of people working onsite at peak

Scheduled delivery Overall completion of the new Heriot-Watt University in Dubai campus is scheduled for December 2020.

adds, pointing out that all workers and staff members onsite are protected

by Khansaheb’s robust Health and Safety standards, which are embedded within the company’s processes and define how things work on site.

“Our K-Standards define the minimum standards for site mobilisation, site setup and worker welfare. They include items such as Five-Point PPE, AC buses for operatives, AC HSE rooms, AC welfare areas for operatives, AC offices for staff, lifts provided for operatives to reach higher floors, filtered and cold drinking water provisions and so on.

“With summer working hours upon us, we have implemented shade covering for external platforms for both deliveries and waste disposal; while water

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stations will be placed on each floor with electrolytes provided to all on site.

Fans and temporary AC units have been placed within the working areas for air circulation and cooling,” Trivett outlines.

Furthermore, pre-start briefings are conducted before activities commence onsite, in line with the Risk Assessment and Method Statements for the works, while toolbox talks are regularly conducted on key project risks, he adds. Operatives are also made aware of changing site conditions, and safety signage in three languages for all operatives and staff to understand is put up across the site.

“At Khansaheb, Health and Safety is our number one priority on all our projects, and we have clear visible Health and Safety leadership from our senior management and Health and Safety manager, who all have a responsibility to carry out frequent, unannounced safety inspections on all projects.

“No works are carried out without an Approved Risk Assessment/Method statement and the pre-start briefing is signed by each operative undertaking the task discussed. Our standards include a card system, where yellow and red cards are issued for non-compliance to HSE requirements. We also regularly hold safety award ceremonies, where operatives and staff are given certificates and prizes for working safely throughout the project, which is a good incentive for all to follow the HSE procedures and guidelines put into place,” he adds.

Due to the threat of COVID-19, Trivett stresses that stringent measures have been put in place to protect staff and operatives, explaining that all authority guidelines are being followed, starting with all personnel entering the building being required to submit to body temperature checks.

“All operatives and staff must wear facemasks and gloves as a mandatory requirement. Sanitisation stations are installed throughout the site, along with signage and toolbox talks conducted for awareness and requirements around social distancing and hygiene. The number of operatives allowed in the lifts are restricted and we have spaced tables and chairs in the welfare area to maintain distance during breaks.

MEConstructionNews.com | July-August 2020

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PROJECT PROFILE

“Materials are being procured from all around the globe as specified for the project. We have procured materials in-line with the delivery required at site dates, and have airfreighted materials as required to meet programme dates,” Trivett adds, pointing out that the project team uses a detailed procurement schedule to track and monitor deliveries.

As a result, any potential delays are flagged early, and alternative plans are put in place to mitigate any potential delay.

As the works are now progressing, procurement, manufacture and delivery of materials is critical, and this is closely being tracked and monitored to ensure deliveries are received in line with project programme requirements” “We have clearly marked red circles throughout the main access routes and waiting areas to indicate distance required between operatives when queuing. The transport of operatives is limited to 50% capacity, allowing only one operative per row on either side of the bus to maintain social distancing. All high touch points throughout the site have dedicated resource allocated to ensure they are regularly cleaned,” Trivett clarifies.

The construction programme for the project has been structured so as to work from the top down, Trivett explains, with work starting on level six and working down through to the floors to the ground floor. Each level has been phased into five separate areas that is managed with dedicated supervision and resources to ensure that the programme is achieved. Each trade commencing with demolition will start on level six and work from North to South towards the material hoist, he says.

Despite the crisis, Trivett says that only minor issues have been encountered during the engineering period, with some engineering delayed due to the late receipt of material samples from international suppliers.

“As the works are now progressing, procurement, manufacture and delivery of materials is critical and this is closely being tracked and monitored to ensure deliveries are received in line with project programme requirements,” he states.

“Some of the key early work packages

THE NEXT PHASE

materials have been airfreighted to us, so as to achieve their programme dates.”

Kaka adds that the biggest uncertainty during the procurement process has been the impact of COVID-19 and asserts that Heriot-Watt has been at the forefront, working with all stakeholders to resolve issues.

“The supply chain of materials was affected by the outbreak and we have therefore been extremely careful to work with project managers, designers and a contractor who could work with Heriot-Watt University Dubai to help share and solve any challenges,” he says.

July-August 2020 | MEConstructionNews.com

Top down construction Ross Trivett says that the construction programme has been structured to work from the top down.

17%

Current project completion rate

As work continues to progress smoothly, the new campus is scheduled to open in January 2021. This will mark the next step in the university’s journey, which has thus far seen it offer internationally recognised and first-class education in Dubai for 14 years. With the university operating five campuses across the UK, as well as one in Malaysia, the new campus in Dubai is shaping up to be a clear embodiment of Heriot-Watt’s values and influences, Kaka says.

“Heriot-Watt was one of the first international campuses to set up in the UAE, and we have always played a leading role in higher education in the region. The new state of the art campus is our next phase of development in Dubai and we hope that it will inspire others and help continue to push the academic landscape in the UAE forward,” Kaka concludes.

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COMMENT

Industry insight

STEPHEN FLANAGAN KNIGHT FRANK MIDDLE EAST

Development Valuations in the Light of Covid-19

I

n the current global situation and present market conditions, there are some significant key points to consider when advising on the value of a proposed or partly completed development.

CONSTRUCTION LEAD-IN PERIOD AND TIMING For ready sites where construction has not yet started, it is prudent to allow for an extended lead-in time prior to commencement of construction on site. This could be an additional three or even six months, depending on the project nature and location. In many cases, contractors will not be willing or able to commence work on site and comply with the rules on social distancing in the workplace.

Supply chains for materials are likely to be subject to some disruption, which could mean that an extended construction period is required, with the nature of the scheme having a significant bearing on this and the construction materials being utilised.

DEVELOPER’S PROFIT In times of heightened risk, an investor or developer will typically seek a greater reward to reflect that proposed risk, but accordingly there is an argument to add a risk premium over and above the level of the development return that would have applied immediately prior to the global COVID-19 outbreak arising.

DEVELOPMENT FINANCE It is acutely important to establish the actual cost of borrowing on the project if it has

July-August 2020 | MEConstructionNews.com

already commenced, as this may provide a good indication of the cost of borrowing levels in the market, as well as speaking to a selection of lenders to gauge current appetite. Despite the historically low interest rates currently in place, lenders, if they have any current appetite for new development finance at all, are likely to be seeking an additional risk premium for new lending to developers.

Normal finance rates are probably only available only to blue chip / strong covenant borrowers, with balance sheet lending rather than project-based finance.

Therefore, a smaller developer could have great difficulty raising finance at anything approaching reasonable rates and lower LTV and higher rates may therefore render some developments impossible to fund at all.

PARTIALLY COMPLETED DEVELOPMENTS Valuations of partially completed developments need very careful review in the current market conditions. Scenario examples include: • Ongoing developments: This is where the lender is requesting an update to assess progress of the scheme and to gauge whether the gross development value (GDV) remains in the same ball park as at the outset of the project. In these cases (subject to any specific client instructions) a valuer would normally assume that the construction contract / developer, remain in place and that the project will broadly

Supply chains for materials are likely to be subject to some disruption, which could mean that an extended construction period is required, with the nature of the scheme having a significant bearing on this and the construction materials being utilised”

continue as originally proposed, although we may of course factor in any cost over-runs, extended construction periods, as well as any changes to the GDV and sales timings.

In the UAE, the practice of off-plan sales and revenues from pre-sales being held in an escrow account to fund construction, will warrant careful consideration going forward from a valuation perspective. Where a residential development is partially complete, consideration must be given to the timing of outstanding sales collections due from buyers.

The probability of strong collections is now likely to be impacted and thus it is important to engage closely with the developer to understand how many requests have been received for cancellation or payment deferment. Other key questions to consider in this process are: • How advanced is the construction progress and what % of due collections have been received to date?

• How well funded is the escrow account and what is the price point of the units under development?

• What is the current value of units in the development versus the contracted value, as well as ascertaining what the likelihood of buyers defaulting is?

In addition, the marketing period for any unsold units in the development, together with the sales price point and any revenue growth assumptions needs careful review. These will need to be carefully examined on a project-by-project basis in close discussion with the developer.

For a commercial project developed for lease, similar careful assumptions need to be made on pre-letting percentages’s, marketing / leasing up periods for vacant space, and rental levels / payment incentives being offered for the same.

SENSITIVITY ANALYSIS It is more important than ever to highlight to clients within the property risks section of the valuation report, the key property risks in the current market. The inclusion of a sensitivity analysis in all cases is considered best practice and will no doubt be requested by all informed lenders going forward.

Stephen Flanagan, Partner and Head of Valuation & Advisory at Knight Frank Middle East.

COMMENT

SANDRA BOU MADI TAQEEF

Retrofitting Old Buildings Key to Meeting the Region’s Sustainability Goals

T

he GCC region’s commitment to smart infrastructure development is changing the planning and construction landscape. With data collection and analytics integration as a key driver in delivering greener, cleaner building stock, there is great potential in technologies that minimise operating costs, maximize efficiencies, and promote targeted user comfort. The challenge then is in adopting these same principles for our existing building stock and how we repurpose buildings with the kind of smart, efficient cooling technologies that not only contribute to a more sustainable environment but also increase long-term investment prospects for building owners, too.

Sustainability remains a vital focus across GCC countries and is evident in each of their national agendas. Strategies to achieve efficiency target puts retrofitting existing high energy-consuming buildings with new sustainable measures front and centre of sustainability plans.

For example, in line with the UAE Vision 2021, Dubai has initiated to retrofit 30,000 buildings by 2030 in a bid to reduce the nation’s energy demands by 30%.

Similar initiatives exist in Oman, Kuwait, and the KSA, and so the drive to be more

sustainable is region wide. We know that deep retrofits are the key to addressing the challenges of climate change.

More than 50% of the energy consumption of a building can be attributed to air conditioning systems, which is why retrofitting using optimum energy conservation measures is important in achieving changes that are cost-efficient and offer a more sustainable use of power.

A study by international consulting firm Booz & Company showed that in the GCC, air conditioning accounts for around 70% of the annual peak electrical consumption, and with cooling demand set to triple by 2030.

For building owners to develop a strategic retrofitting plan, they need a creative, multidisciplinary approach that looks at technology, automation, and data analytics.

The first step is to conduct level 1,2 and 3 energy audits. This is done to highlight the energy conservation measures, capital expenditures (CAPEX), potential energy savings capabilities, and payback and lifecycle costing. A walk-through audit identifies areas with high energy usage or what we call EUI “Energy Use Intensity”, dividing energy

Making existing commercial properties greener isn’t a burden, but a real business opportunity. The benefits of retrofitting are significant – enabling developers to sustainably improve their real estate investment while limiting their building and development impact, reducing costs, and improving customer satisfaction and comfort”

37

consumption of the whole year by the airconditioned area to compare it with similar buildings. This gives a good indication as to how much energy can be saved, and more detailed measurements and energy simulation is then used to model energy conservation measures and the most suitable retrofit plan for the building. Energy conservation measures are categorised as no-cost and low-cost and while shallow retrofitting measures can lead to savings of up to 15%, deep retrofitting of HVAC systems is where the real opportunities lie, significantly cutting electrical consumption by up to 50%.

Technology proposals will be tailored to building type and usage, however, VRF is particularly effective for the repurposing and retrofitting of the old buildings we see in this region. Indeed, Variable Refrigerant Flow (VRFs) has been identified as a strategic technology delivering peak energy savings and driving the region’s cooling industry to reduce carbon footprints. Most cooling systems in old buildings can easily be retrofitted or replaced by smart VRF systems (with minimum disruption to occupancy) thanks to its high adaptability.

These systems also demonstrate long-term proficiency in operating expenses (OPEX) and maintenance costs which, coupled with the adaptable cooling, put VRF at the technology of choice for the next generation of smart and green buildings. Additionally, when used with integrated smart technology (such as learning thermostats), further optimization is realised increasing efficiency outcomes by a further 10-12%.

Making existing commercial properties greener isn’t a burden, but a real business opportunity for owners and developers to reduce business costs as well as meeting their corporate responsibility. The benefits of retrofitting are significant – enabling developers to sustainably improve their real estate investment while limiting their building and development impact, reducing costs, and improving customer satisfaction and comfort. Perhaps most importantly, a strong forward-looking retrofit strategy is a significant and ultimately necessary step to stay ahead of the sustainability game.

Sandra Bou Madi, Head of Business Development at Taqeef.

MEConstructionNews.com | July-August 2020

38

EXPERT VOICE

HKA

The Complexities of MEP Design MIDDLE EAST

Bill Haggart, director of Engineering at HKA, explains why the devil is in the detail when it comes to designing MEP systems and interfaces that prevent disputes from arising

T

he design and installation of MEP systems, that intertwined network of ducts, pipes, wires,

generators, controllers and emitters that bring our buildings to life, is an extremely complex and complicated part of any construction project.

Figure 1 shows the most common MEP systems that might be installed in a building – amounting to over fifty different MEP systems that need to be designed and coordinated with one another, as well as with other trades and disciplines.

Few of these systems can be regarded as stand-alone systems; many of them interface with others and all of them must be considered holistically for space planning requirements. The complex web of the interfaces that exist between each of the MEP disciplines makes for a very complicated picture!

The cost of MEP systems in a building project can range between 25% and 40% of the total construction cost depending on the nature and function of the building. Failure to identify, define and manage the many interfaces between MEP systems during design and through to installation

July-August 2020 | MEConstructionNews.com

can often give rise to costly disputes in construction projects.

Some MEP interface problems are more common than others: • Alignment of above ground and below ground drainage; • Power supplies for mechanical equipment; • Location and provision of primary service connections to shell spaces; • Methods of termination of primary service connections to shell spaces; • Provision of containment (cable trays and trunking) for other systems; • Utilities connection points; • Interfaces between sitewide distribution systems and individual building systems (district cooling for example); and • Contractor designed elements.

With many MEP interface issues, the cost of rectification of the physical deficiencies can pale into insignificance when compared to the cost associated with the

delay in rectifying the issue. An example I encountered on a recent project concerned a dispute over the design responsibility of the site electrical infrastructure and obtaining the appropriate approvals from the supply authority.

The dispute resulted in a delay to the power-on date for the site, which in turn impacted the testing and commissioning of the MEP systems and introduced the need for additional standby generators while waiting for power to be connected. All of which delayed the project handover and invoked delay damages against the contractor.

HOW DESIGN AND CONSTRUCTION INTERFACES HAVE CHANGED When I started my career it was usual for the MEP subcontractors to be discipline-specific in that there would be a separate subcontractor for mechanical and plumbing installations and another subcontractor for the electrical installation.

39

FOR FURTHER INFORMATION Please visit the HKA website at: www.hka.com Over time, design and build procurement gained popularity and the MEP subcontractors became bigger multi-discipline organisations that would be responsible for the complete MEP installation. At the same time, MEP consultants started to fragment into specialisms.

For example, systems that would have been designed by an electrical engineer such as security and IT systems are now commonly designed by specialists.

Current trends in the construction industry, and particularly in large projects, is to have separate contractors responsible for parts of the installation under separate contracts.

On infrastructure projects the MEP installation can be done by different contractors in each building with a separate contractor responsible for the site-wide utilities installation.

The development of smart building technologies that operate on integrated common platforms and networks further creates another set of interfaces that is perhaps more difficult to define.

The bridge between software, system hardware and operational outputs includes not only physical interfaces but also the

FIGURE 1: INTERFACES AND RELATIONSHIPS BETWEEN MEP SYSTEMS Cooling Staircase Pressurisation Sprinklers

Refrigeration

Lightning Protection

Utilities

Utilities

Air Conditioning

Generation Plant

Compressed Air Hot Water

Water Treatment

UPS

Cold Water

Potable Water

Energy Metering

Rainwater

Plumbing

Hose Reels

LIfts & Escalators

Drainage

Gas Extinguishing Systems

Wet & Dry Risers

External Hydrants

compatibility of each system’s communication protocols.

It should come as no surprise then that a fragmented design process, coupled with multiple installation contracts and everchanging technologies, creates numerous interfaces that must be accurately defined and described in the contract scope of work to avoid subsequent disputes arising.

Interface management and poorly defined contract requirements feature in the top five causes of disputes in

more than 700 projects that we have analysed (Figure 2).

HOW TO MITIGATE THE RISK OF DISPUTES ARISING FROM INTERFACE ISSUES? In many of the disputes I have seen, poorly written scopes of work that fail to adequately define interface responsibilities are frequently referenced as a primary source of dispute. Project specifications that run to many hundreds of pages and are generated from software packages using typical specifications

Design was incomplete

300

Poor management of sub-contractor/supplier and/or their interfaces

250

Level of skill and/or experience

200

Design information was issued late

150

Contract management and/or administration failure

100

50

Contract requirements were poorly drafted

Electrical

FIre Alarm Telephone Systems Radio & TV Public Address Intruder Alarm CCTV Access Control

Fire Water

FIGURE 2: HKA CRUX SUMMARY OF TOP PRIMARY AND SECONDARY CAUSES OF DISPUTES IN THE BUILT ENVIRONMENT ( PRIMARY SECONDARY)

Change in scope

LV Power

Earthing & Bonding

BMS

Exhaust gas flue

MV Power

Clock Systems

Pneumatic Systems

Fuel oil storage

Containment

Data & IT

Natural Ventilation

Gas Distribution

Small Power

Street Lighting

Control Systems

Mechanical

Lighting Controls

Lighting

Mechanical Ventilation

Smoke Ventilation Steam & Condensate

Emergency Lighting

Heating

for MEP systems either lack the “glue” of the basic information that defines who does what or, if it is defined, it is not done accurately.

Defining the interfaces at the design stage through the simple use of a responsibility matrix and obtaining buy-in from construction and design managers early in the process would eliminate a huge amount of potential for subsequent disputes.

The increasing use of collaborative design processes such as BIM and the adoption of advanced modelling and simulation software in MEP design are fantastic developments in the automation of MEP design. These tools and processes allow systems to be designed extremely quickly and to very high levels of accuracy.

That said, failure to know and understand the interfaces in MEP system design cannot be rectified by the use of sophisticated software alone. Indeed, it could be argued that over-reliance on these tools may be a root cause of some of the issues that are encountered!

The old adage that “the devil is in the detail” is hugely relevant in MEP systems design. Without properly defined interfaces, even the best designs will provide opportunities for costly disputes to develop.

MEConstructionNews.com | July-August 2020

40

EVENT REVIEW

Value Engineering

Virtual Value Engineering Summit 2020 Big Project ME recaps the first-ever virtual value engineering summit, a four day event held from June 28 to July 1, 2020 PLATINUM SPONSOR

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July-August 2020 | MEConstructionNews.com

EVENT REVIEW

F

rom June 28 to July 1, CPI Trade Media held its first ever Virtual Value Engineering Summit, the third edition of the annual Value Engineering Summit, and the first to gone entirely digital due to the ongoing restrictions imposed by the COVID-19 pandemic.

The nearly week-long virtual event saw well-known industry experts participate in insightful panel discussions, as well as share ideas and approaches to

construction through online presentations and opinion pieces and case studies. All of the content created for the Virtual VE Summit was broadcast to a combined audience of thousands, with the virtual panel discussions and presentations alone gathering more than 1,500 viewers from across the regional and international construction industry.

Centred on construction efficiency, project management, fast-tracked projects and

generating efficiencies in construction, the topics discussed during the Virtual VE Summit aligned with the overall theme of value engineering in a world that has been drastically impacted by the ongoing COVID-19 pandemic.

The first day of the summit saw a panel discussion beginning at 10AM and running for an hour, followed by a live presentation at 12PM. This panel – Finding New Efficiencies – was moderated by Gavin Davids, group editor of CPI Trade Media’s Construction

41

Division and editor of Big Project ME. It featured Phil Branson, UK director at Omnium International. Ralf Steinhauer, director at RSP, and Tom Gilmartin, business development manager at ALEC Fitout.

The presentation for Day One was by Mouthanna Haddadin, commercial manager and acting operations manager at Innovo Constructions.

Both panel and presentation were followed by 15 minutes Q&A sessions, where panellists and

Panel Recap: Finding New Efficiencies Tom Gilmartin, Panellist

As a starting point, for all project stakeholders, especially developers, the difference between cost cutting and value engineering is important to understand and define.

True value engineering maintains the design intent whilst also providing a high quality of finish similar to the original performance specification. Cost cutting negatively impacts on quality of finish and design intent.

To achieve value for the client, and to have effective reduction in cost without impacting quality, is was agreed by all that early engagement and early definition of target budget is critical to the success of the value engineering process.

Effective value engineering takes considerable resource and time. Options, ideas and sample materials are sourced,

shared and commented on by the project stakeholders in an iterative process to ensure the proposed samples, systems, materials are similar to original aesthetic and performance intent.

An ALEC FITOUT value engineering framework was discussed, whereby clientele can be provided with a “shopping list” of options with clearly defined savings associated with each option. To facilitate maximum value from the process, especially for buildings that will be owner operated (for example a hotel), early review of structure, façade and MEP systems is encouraged as these packages typically equate to 70% of the build costs, and contribute significantly to the life cycle operating costs.

A collaborative, aligned philosophy with early engagement is advised. However, in reality this will be very challenging to implement – developers, either through habit or through mandate insist on trusting in the traditional delivery model of design, tender, construct. However, this model is inherently flawed.

More often than not an architect will design a building without understanding the client’s real budget. The consultant team

will then prepare a cost estimate for the project and package a tender requesting “base bid” and “alternative bids” as already the budget, now disclosed to the cost consultant is at risk.

Contractors will spend considerable resource and time to prepare proposals only to be told, after months of effort, that the project is over budget and we need to re-tender based on a value engineered design.

We need to ask ourselves: X Why is the budget not clearly understood at the start of the process?

X Why spend considerable time and cost preparing tenders only to have to retender / redesign to achieve a budget?

At ALEC FITOUT, we have established a successful value engineering delivery framework developed from our experience gained in direct negotiation of projects with key clientele.

Engaging early in the design process, estimating and finetuning budgets in parallel with design development and also in collaboration with the design teams. This approach requires significant levels of trust and transparency – which are unfortunately lacking in

the Middle East construction and fit out market – however, the value to be gained for the client team in trusting the process is considerable.

A global target budget for the project is openly discussed and agreed by all parties upfront.

The creative process is not impacted by budget constraints at concept stage; however, design optimisation and value engineering are implemented during concept in collaboration with the design team to ensure that design intent and vision is within the client agreed parameters. Schematic and Design Development as well as coordination of design and firming on budget run all in parallel.

All project stakeholders, working closely together, are aligned with the common goal of project success, and can using this value engineering negotiated delivery framework have a win – win for all.

In summary, it is our experience that an early engagement, negotiated, design to budget, value engineering approach is the most practical and effective delivery model for developers wishing for timely delivery, whilst managing cost and ensuring.

MEConstructionNews.com | July-August 2020

42

EVENT REVIEW

presenters answered queries posed by online viewers from across the region’s construction industry.

Day Two saw the Virtual VE Summit’s second panel discussion – A True Collaborative Approach – hosted by Nithin Thomas, senior BIM manager at Shapoorji Pallonji International.

It featured Charlie Harris, branch director at Omnium International, and Rita Allen, senior associate at Pinsent Masons.

Following the panel discussion and Q&A in the morning session,

two presentations from Herman van Eeden, senior consultant at RIB Software, and Sorin Bularca, AEC technical sales specialist at Autodesk Middle East, were held at 12PM and 1PM respectively.

Day Three featured a panel discussion centred around the use of technology in the value engineering process. This was hosted by Craig Garett, Digital Advancement Academy manager for Bentley Systems and featured insights from Naji Atallah from Autodesk and Stephen Degenhart

from Drees & Sommers Day Four closed out the 2020 edition of the Value Engineering Summit with a special MECN. com newsletter that recapped the week and shared fresh content from Atkins, Autodesk, CDM Smith and Omnium Resolve.

Previously scheduled to be a live event on March 30 in Dubai, the outbreak of COVID-19 and safety precautions outlined by UAE authorities dictated that the event be postponed. Given the importance of the topic

however especially in light of new pressures on the construction sector, the team at Middle East Consultant and Big Project Middle East decided that the show must go on as a digital event.

The event is supported by Omnium International, Hard Precast Building Systems (HPBS), Drees & Sommer, Intertek, RIB, Redington, Autodesk, MZ Architects as well as CIOB and RICS. To view the panel discussions and presentations, please visit: https:// meconstructionnews.com/live-videos

Panel Recap: Time to Heed the Call of Technology Craig Garrett, Moderator

I consider being a member of a panel discussion something of an honour. Not only because I get to share in a discussion with a collection of well-respected industry colleagues, but also because it gives me an opportunity to openly discuss and comment on some of the challenges we face in our working lives.

An open panel discussion allows for the conversation to wander throughout the participants and often drift to topics even more interesting than what was initially asked.

My panellist colleagues were Naji Atallah from Autodesk and Stephan Degenhart from Drees and Sommer. Unfortunately, Bahaa Ibrahim from Hard Precast Building Systems, was unable to join us and his input was sorely missed.

The discussion, like many happening across the industry, addressed the challenges faced by all stakeholders during the COVID-19 pandemic.

But what was indeed encouraging was the general feeling from all panellists that organisations throughout the region are rising to the challenge, if not actually getting on top of the situation from an operational, collaborative, and technology adoption perspective.

Currently, the uptake of cloudbased collaboration solutions is approximately four times that of any other technology solution adoption. Therefore, confirming that we have indeed found a new status quo when it comes to sharing project data, on demand globally, in a structured and managed environment.

“We are at a turning point in the industry, our business as usual mindset needs to change. Digitalising the data by using a CDE can provide a 90% drop in the time required to look for data, be that files or drawings, etc. The real value being that engineers can then focus on their core value of providing better designs for assets,” said Naji Atallah.

July-August 2020 | MEConstructionNews.com

All panellists were asked to qualify their views and understanding using case study examples that demonstrate actual experiences. The examples illustrated how best-practice advice is being adopted by delivery teams.

Appreciating that certain processes are actively being adopted by key clients in the market assures others, who might otherwise have been reluctant, to realise the earned value that can be achieved.

The panel also acknowledged the role of off-site manufacturing and modular construction that will become a major influence. While understanding that it is not an overnight transformation, or that it might not be suitable for every project, this approach must be included in the digital delivery strategy from the very beginning of the concept stage. Adopting such a strategy will align the supply chain from the outset.

“Smart is good, technology is good, modular is good, but it always has to make sense.

Technology just as a gimmick doesn’t help. There must be a benefit or added value for a return on investment at every

phase to justify adoption,” added Stephan Degenhart.

Major organisations are, more than ever, starting to realise through the new wave of current common data environment adoption that these solutions are creating a foundation or platform on which to build a better user experience overall. This goes beyond creating a digital twin or a smart city. But, understanding that owning and managing the data allows for a new layer of how we consume data, not just for project design and delivery but for 20, 50 or 100 years into an asset’s operational future.

While the panel considered the pandemic, we should also be aware of the bigger concerns ahead. We must not forget the environmental challenges we already face, including a climate crisis, and realise that the construction industry has a major role to play. Here, technology can also address the selection of materials and sustainability goals. Valuable resources are used in our projects, so we must look not just to the next six months, but way beyond that to what we need to change with regard to the environment around us.

EVENT REVIEW

Panel Recap: A True Collaborative Approach Nithin Thomas, Moderator

I had the privilege of moderating for the first Virtual Value Engineering Summit 2020 produced by CPI Trade Media.

Attended by industry specialist Rita Allan, senior associate at Pinsent Mason and Charlie Harris, branch director at Omnium International Ltd. The panel started off with a brief discussion about finding an accurate definition of ‘true collaboration’ within the industry.

Each of the panellists reiterated

the importance of technology and how its implementation came to the aid of the industry during this pandemic period. Both panellists believed productivity has not been greatly affected during this pandemic period as the industry embraced without much disruption technologies which helped business continue as usual.

Charlie also added that he felt productivity had improved during this low season.

Both panellists felt that contracts could be better structured to complement collaboration. The influence of bespoke contracts in the region could be a deterrent for true collaboration, however.

Furthermore, both Rita and Charlie agreed that individual silos within projects, adversarial culture, lack of trust, and so on act as major deterrents.

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Considering how the industry has had to deal with this unexpected pandemic, both panellists focused on the importance of contractors demonstrating their readiness under the cover of insurances, etc. going forward on projects.

They highlighted this as something for the industry to take note of and to be ready for.

When questioned as to whether a different approach towards procurements, such as Design and Build could pave way for better collaboration, both panellists agreed this could be one such approach for the industry. Charlie and Rita were also of the opinion that these procurement routes would not yield anticipated results if cost is the primary selection criteria.

Rita additionally added that PPP/PFI procurement routes are

43

becoming a subject of contention for major infrastructure projects, and all panellists agreed that considering the current market situation; most employers will be looking at cost as a factor for employers and that traditional routes of procurement will be in contention in the present time.

Going forward, there will be a need for the industry to demonstrate capability in data security in order to securing projects. The new normal will include working from home, remote collaboration, and cloud data sharing, which will be a challenge for an Industry that is very traditionally rooted.

The industry is not where it was before and will not be the same going forward. With an increased reliance on technology, moving towards true collaboration does seem like the correct choice.

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MEConstructionNews.com | July-August 2020

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TENDERS

Middle East tenders UAE AVIATION

Al Maktoum International Airport Expansion Concourse 1 & West Terminal Substructure Works BUDGET $2.8 billion CLIENT Dubai Aviation Engineering Projects TERRITORY Dubai South, Dubai DESCRIPTION The project’s scope of work involves the construction of site grading, tunneling, runways, stands and roads, foundations, basement walls, columns, basement slabs and top slabs for the 2.7 kilometers concourse 1, west terminal building, short-term car park and staff car park located at Al Maktoum International Airport, Dubai South, Dubai. The substructure will have a depth exceeding 18 meters underground and will require the pouring of about 5.5 million cubic meters of concrete and 1 million tons of steel.

COMPLETION 30/12/22 ENERGY

Al Dhafra Independent Power Plant BUDGET $1.6 billion CLIENT Abu Dhabi Department of Energy TERRITORY Al Dhafra, Abu Dhabi DESCRIPTION The project’s scope of work involves the construction of 2000 megawatts photovoltaic (PV) solar plant located at Al Dhafra, Abu Dhabi. It also includes installation of solar panels of photovoltaic modules, control rooms, the operating building and associated facilities. The project will lift Abu

Dhabi’s solar power capacity to 3200 megawatts. Once completed, the project site will cover an area of 20 square kilometers, almost doubling the capacity of the current largest operational single-site solar photovoltaic plant in the world, Noor Abu Dhabi.

COMPLETION 30/01/23

SAUDI ARABIA ENERGY

Ar Rass 700 MW Solar Plant

HOSPITALITY

Saadiyat Island Ritz Carlton Resort BUDGET $127 million CLIENT Danat Hotels & Resorts TERRITORY Saadiyat Island, Abu Dhabi DESCRIPTION The project scope of work consists of a resort located at Saadiyat Island, Abu Dhabi. The project comprises 380 hotel rooms, 7 residential buildings, 250 apartments, 32 villas, 75 luxury villas, parking facilities and associated facilities.

COMPLETION 30/10/22

consist of 4 dedicated residential basement parking and 3 upperlevel parking for retail clients. The partly double height ground floor and the first floor is developed for retail clients. The fourth podium roof level also provides for gymnasium & residential swimming pool facilities, shopping mall, car parking area, construction of utilities, infrastructure works, development of landscape and associated facilities.

COMPLETION 30/03/24 RESIDENTIAL

MIXED-USE

Corniche Towers BUDGET $110 million CLIENT Inland Real Estate Investment Corporation TERRITORY Corniche Road, Abu Dhabi DESCRIPTION The project’s scope of work consists of 3 commercial and residential towers each comprising 29 floors. The towers are primarily a residential development with commercial space on the ground and podium floors. The towers

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La Vie Tower BUDGET $80 million CLIENT Dubai Properties Group TERRITORY Jumeirah Beach Residence, Dubai DESCRIPTION The project scope of work consist of a 37-storey residential tower located in Jumeirah Beach Residence, Dubai. The project work includes a common garden, an infinity pool, a kids club, a restaurant, retail area and parking facilities.

COMPLETION 30/03/23

BUDGET $900 million CLIENT Renewable Energy Project Development Office TERRITORY Ar Rass, Saudi Arabia DESCRIPTION The project’s scope of work involves the construction of 700 megawatts photovoltaic solar plant located at Ar Rass, Saudi Arabia. The project also includes the two solar power plants, installation of solar panels, transformers and laying of transmission lines.

COMPLETION 30/12/23 ENERGY

Saad 300 MW Solar Plant BUDGET $410 million CLIENT Renewable Energy Project Development Office TERRITORY Saad, Saudi Arabia DESCRIPTION The project’s scope of work involves the construction of 300 megawatts photovoltaic solar plant located at Saad, Saudi Arabia. The project also includes two solar power plants, installation of solar panels & transformers and laying of transmission lines.

COMPLETION 30/12/23 INFRASTRUCTURE

Al Faisaliyah Water Reservoir BUDGET $170 million CLIENT National Water Company TERRITORY Al Faisaliyah, Jeddah DESCRIPTION The project’s scope of work involves the construction of dome roof concrete reservoirs with storage capacity of 1000,000 million cubic meters at Al Faisaliyah in Jeddah, Saudi Arabia. The scope also covers the construction for four concrete reservoirs, 15m wide stable track around the tank, access roads,

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TENDERS

installation of pumps, pipelines and other associated facilities.

COMPLETION 30/11/22 INFRASTRUCTURE

Jeddah Housing Water Pipeline Improvement Works BUDGET $65 million CLIENT National Water Company TERRITORY Jeddah, Saudi Arabia DESCRIPTION The project’s scope of work involves the construction of a new line to replace the existing 600 mm asbestos line west of the city road until the beginning of the housing project in Jeddah, Saudi Arabia. The project work includes connecting the new 800mm cast iron pipeline to the existing line of diameter 1400 mm with a length of 10 kilometres km and replace the asbestos line diameter 600 mm.

COMPLETION 31/01/24 INFRASTRUCTURE

Makkah Gate 380/110/13.8 kV Substation BUDGET $45 million CLIENT Saudi Electricity Company TERRITORY Makkah, Saudi Arabia DESCRIPTION The project’s scope of work involves the construction of a 380/110/13.8kV substation in Makkah, Saudi Arabia. The scope covers installation of 502MVA, 380/110/13.8kV power transformers, 67MVA, 110/13.8kV power transformers, 2.5MVA, 13.8kV/400V-230V station service transformers, HV/MV power cables and terminations, civil works and mechanical works.

COMPLETION 30/12/22

TERRITORY Muscat, Oman DESCRIPTION The project’s scope of work involves the dualization of Al Ansab street from Falaj Al-Sham Roundabout to Cement Factory. The total length of dualization is approximately 6.5 kilometers (km). The scope also includes 8 kilometers single carriageway, two dual carriageway of 2x3 lane (option 1) and 2x2 lane (option 2) respectively, 1 vehicular underpass, 1 over-bridge, box culverts, box culverts, new sub-stations, retaining walls, four flyovers, service roads, road and footpath surfacing, installation of traffic signal systems, road lighting systems, road and overhead sign structures, road markings and utility protection units and associated facilities.

COMPLETION 30/12/22

INFRASTRUCTURE

Liwa Sewage Treatment Plant

BUDGET $35 million CLIENT LuLu Group International TERRITORY Boushar, Muscat, Oman DESCRIPTION The project’s scope of work involves the expansion of Mall located at Boushar, Muscat, Oman.

The project includes physical expansion to add more room for anchor stores, restaurants and entertainment options.

COMPLETION 30/12/21

INFRASTRUCTURE

Al Seeb Water Distribution Network (Package 3) Phase 1 BUDGET $80 million CLIENT Oman Public Authority for Electricity & Water TERRITORY A’seeb Wilayat, Oman DESCRIPTION The project’s scope of work involves the construction of water distribution network located at A’seeb Wilayat, Oman.

COMPLETION 30/03/23 RETAIL

Oman Avenues Mall Expansion (Phase 3)

OMAN

COMMERCIAL

Ibri Science & Innovation Center BUDGET $35 million CLIENT Jusoor Foundation TERRITORY Ibri, Oman DESCRIPTION The project’s scope of work involves the construction of the Al Buraimi Science and Innovation Center in Ibri, Oman. Facilities within the building include a multi-purpose hall, a library, a theatre, an astronomical observatory dome, a celebration hall and parking facilities.

COMPLETION 30/12/22

BUDGET $30 million CLIENT Haya Water Company TERRITORY Liwa, Al Batinah, Oman DESCRIPTION The project’s scope of work involves the construction of the sewage treatment plant with a capacity of 14000 cubic meters of water per day located at Liwa, Al Batinah, Oman. The project also includes the establishment of an irrigation network with a total length of about 63 kilometers, pumping stations, filters, and installation of pipelines.

COMPLETION 30/12/22

BAHRAIN RESIDENTIAL

Al Lawzi Housing Development BUDGET $130 million CLIENT Bahrain Ministry of Housing TERRITORY Al Lawzi, Bahrain DESCRIPTION The project’s scope of work consist of 132 housing units located at Al Lawzi, Bahrain. The project also includes associated secondary infrastructure work.

COMPLETION 31/03/23 RETAIL

Sakhir Shopping Mall BUDGET $50 million CLIENT Bahrain Tourism & Exhibitions Authority TERRITORY Sakhir, Bahrain DESCRIPTION The project’s scope of work consist of a shopping mall located in close proximity to Bahrain International Circuit, Sakhir, Bahrain.

COMPLETION 30/12/22

INFRASTRUCTURE

INFRASTRUCTURE

Al Ansab Street Dualization (Phase 1)

Bandar Al Sayah Development Reclamation Works

BUDGET $120 million CLIENT Muscat Municipality July-August 2020 | MEConstructionNews.com

BUDGET $35 million

TENDERS

CLIENT Eskan Bank TERRITORY Sitra, Bahrain DESCRIPTION The project’s scope of work involves the reclamation works for Bandar Al Sayah Development located at Sitra, Bahrain. The development will include the filling of an area of approximately 185 hectares, reclamation of landforms to lines and levels, construction of edge protection, breakwaters and rock groyne structures, beaches, dredging of the navigation channel, canal, general filling works, quay wall, breakwaters, and dredging works.

COMPLETION 30/11/23 RETAIL

Manama Souq Revitalisation BUDGET $30 million CLIENT Bahrain Ministry of Works, Municipalities Affairs & Urban Planning TERRITORY Old Manama Souq, Manama, Bahrain DESCRIPTION The project’s scope of work involves revitalisation of the old Manama Souq, Manama, Bahrain. The scope also covers maintenance and modification works of phase 3, cosmetic touches on the previous shops in phases 1,2,4 and 5, renovation works of 47 shops, parking facilities and other associated facilities.

The project includes dedicating street passages designated to pedestrians and shoppers and easing access to the area for cars.

COMPLETION 31/12/21 COMMERCIAL

News Production Studio BUDGET $25 million CLIENT Ministry of Information Affairs Authority TERRITORY Bahrain DESCRIPTION The project’s scope of work involves the construction of the News Production Studio, administrative units, parking facilities, meeting

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85 meters x 125 meters playground, four wards for players, special wards for referees, special clinics for players, VIP visitor’s suite and lounge, reception halls, kiosks and rest areas, stores, parking space, and infrastructure works.

COMPLETION 30/10/23 RETAIL, HOSPITALITY

Hawally 4 Star Hotel

rooms, conference halls and other associated facilities at the Ministry of Information Affairs Complex in Bahrain.

COMPLETION 30/12/22

KUWAIT EDUCATIONAL

Mushrif College of Music & Performing Arts BUDGET $210 million CLIENT Kuwait Ministry of Public Works TERRITORY Asimah Governorate, Kuwait DESCRIPTION The project’s scope of work consists of a 5-storey college buildings located at Mushrif in the Asimah Governorate, Kuwait. The project also includes a supportive dome theatre, supportive infrastructure, roads, parking area, site offices, storage area, proposed building, debris collection area and installation of generator and fuel tank.

COMPLETION 30/03/23 MIXED-USE

Egaila Services & Entertainment Center BUDGET $125 million CLIENT Kuwait Authority for Partnership Projects TERRITORY Al-Ahmadi Governorate, Kuwait DESCRIPTION The project’s scope of work consist of a 4-storey

recreational, cultural, commercial, and sports center located at Fintas Commercial and Administrative Area, in Al-Ahmadi Governorate, Kuwait. The project also includes a 112,000 square meters cinemas, a children playground, a junior playground, a heritage hall, a multipurpose hall (men & women), a music hall, a theater, restaurants, cafes, commercial stores, a bowling hall, a health club offices, 20,000 square meter fresh food market and an ice-skating hall.

COMPLETION 30/03/24 RECREATIONAL

Jaber Mubarak Al Hamad Al Sabah Stadium BUDGET $70 million CLIENT Public Authority for Youth & Sports TERRITORY Al Sulaybikhat Sports Club, Kuwait City DESCRIPTION The project’s scope of work consist of a stadium located at Al Sulaybikhat Sports Club, Kuwait City, Kuwait. The project also includes the development of

BUDGET $55 million CLIENT Tamouh National General Trading and Contracting Company TERRITORY Al Mutasim, Hawally, Kuwait DESCRIPTION The project’s scope of work consists of a 32-storey hotel tower located at Al Mutasim, Hawally, Kuwait. The project in addition to three basement car parking floors will include a hotel lobby, reception and spa, and 31 above-ground floors, 22 of which are hotel guest areas with five hotel rooms per floor and a luxury floor that will host two large guest suites. In addition to 122 hotel rooms, it will also contain two specialty restaurants, retail shops, children’s play area, all-day dining facility, terrace, and administrative offices and facilities such as meeting rooms, laundry areas and a central kitchen.

COMPLETION 30/01/24 EDUCATIONAL

Sabah Al Nasser Boys & Girls School BUDGET $30 million CLIENT Kuwait Ministry of Higher Education TERRITORY Sabah Al Nasser, Kuwait DESCRIPTION The project’s scope of work consists of 2 school buildings located at Sabah Al Nasser, Kuwait City, Kuwait. The project also involves classrooms, a kindergarten, an elementary school, a middle school, a high school, administration facilities, auditorium, multipurpose halls, a playground, a gymnasium, a cafeteria, and parking facilities.

COMPLETION 30/03/22

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PROGRESS REPORT

Final update

Union Coop announces 92% of work completed on Warqa City Mall project Project set to be handed over by contractor in July 2020

U

nion Coop, the largest consumer cooperative in the UAE, has announced that 92% of work has been completed on its Warqa City Mall project, which is being developed at an investment of $58.5 million in Dubai.

The project comes within the framework of Union Coop’s plan for a strategic expansion and increasing its outreach to serve members of society and contribute towards obtaining a unique shopping experience, a statement from the cooperative said.

Located in the Al Warqa 3 area of Dubai, the project overlooks Tripoli Street, which separates the area of Al Warqa from Mirdif and leads to Emirates Road.

Furthermore, the strategic location enables the mall to serve a large segment of the population of the region, the statement added.

The retail destination consists of two basements, ground, first floor and an offices floor, with a total built-up area of 62,523sqm. The two floors of the basement and part of the ground floor are allocated to parking lots with a total of 671 spaces, divided into 224 spaces per basement floor, and an addition 223 parking spaces on the ground floor.

The mall will also contain 44 stores, with an area of 5,264sqm, distributed into 26 stores on the ground floor and 18 on the first floor.

July-August 2020 | MEConstructionNews.com

Strategically located The retail destination is strategically located in the Al Warqa 3 area, overlooking Tripoli Street, which enables it to serve a large segment of the population in the regional area.

44 Total

number of stores in the mall

The second floor will house Union Coop management offices, with an area of 5,109sqm, the statement elaborated.

CEO Khalid Humaid Bin Diban Al Falasi said: “Al Warqa’a City Mall project is in the final finishing stages and under inspection

by Dubai Electricity and Water Authority for power connection. The showroom shelfing and refrigerating equipment are already supplied and the installation has started.”

“The project will be delivered by the contractor in the middle of the next month,” he stated.

Union Coop has coordinated with the Roads and Transport Authority to implement the roads surrounding the mall as well as the link to Tripoli’s main street, at a total cost of $6.8 million.

More than 20% of the work has been completed and all roads will be ready by mid-July, he concluded.

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