Big Project ME January 2022

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188 January 2022

MEConstructionNews.com

THE BUSINESS OF CONSTRUCTION

Construction Influencer

KEZ TAYLOR, CEO OF ALEC, SHARES HIS THOUGHTS ON THE FUTURE OF DUBAI, THE LEGACY OF THE EXPO, AND THE URGENT NEED FOR CHANGE IN CONSTRUCTION

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CONTENTS

January 2022

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16

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28

44

ANALYSIS

FEATURES

INSIGHT

08

The briefing

22

38

Comments

The big picture

Gavin Davids exclusively speaks to Kez Taylor, CEO of ALEC, about the legacy of the Expo and the future trends of the regional construction industry

40

Tenders

Progress report

Pinsent Masons warns that increased litigation is on the way and Bentley Systems showcases SYNCHRO

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In profile Kez Taylor

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, in association with ProTenders, provides the biggest tenders for the month of January 2022

16

Market report

Big Project ME speaks to Bassem Ezzat Ayaad of ASGC, about how the iconic pavilion is truly a building for the future of Earth

44

18

Analysis

Knight Frank reviews the Abu Dhabi residential market

Project profile Terra - The Sustainability Pavilion

Ellington Properties announces the topping out of Harrington House

David Clifton of Hill International takes an in-depth look at the dynamics of the Saudi Arabia construction market for 2022

MEConstructionNews.com | January 2022

2

WELCOME

Introduction

A year of promise

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elcome to the beginning of 2022. I can’t quite believe that I’m already writing an introduction to the year ahead, given that it feels like it was just a week ago that I was planning for 2021 – the year has certainly flown by, an indication perhaps of how busy the industry has been over the last 12 months.

A large part of this momentum has come from the Kingdom of Saudi Arabia, which seems to be awarding contracts and announcing projects on an almost daily basis.

However, that isn’t to say that the UAE is sitting idly. In just the last few months, we’ve seen a raft of oil and gas engineering contracts being announced, while the residential sector continues to be in focus for developers.

What’s interesting about all of this, however, is that while there is considerable optimism, the contractors are still wary about rushing headlong into these projects.

The general consensus, as laid out by David Clifton in his fantastic analysis for

January 2022 | MEConstructionNews.com

us in this month’s issue, is that while there are signs of change in the Kingdom, issues still persist around imbalances and price volatility in the materials and logistics markets. These issues need to be resolved or they will hamper the delivery of the government’s planned megaprojects.

Closer to home, contractors in the UAE say that they continue to encounter age old problems during project delivery, with Kez Taylor, CEO of ALEC, highlighting the need for the industry to embrace the lessons of the Expo and improve the way we communicate and coordinate with each other.

Before I sign off, I would like to highlight a huge positive for us at Big Project ME. As many of you will know, we’re holding our annual Awards on January 24, 2022, at The Raffles Hotel, Wafi in Dubai. This year, we have received an astounding 231 nominations – the most we’ve ever received. The strength and diversity of these nominations is hugely exciting, as it illustrates the health of the industry as a whole. The judges and I will certainly have our work cut out for us when it comes to choosing our winners for the year.

All the best for the year ahead.

Gavin Davids

HEAD OF EDITORIAL & CONTENT gavin.davids@cpitrademedia.com @MECN_Gavin MEConstructionNews me-construction-news

“Big Project Award is very special to us considering the level of competition, type of projects considered and the geographies covered.”

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VP AND HEAD OF INTERNATIONAL OPERATIONS BUSINESS GROUP VOLTAS LIMITED

24 January 2022 Raffles / Dubai / UAE

Contact Us Table Booking & Sponsorship Jude Slann | +971 4 375 5714 jude.slann@cpitrademedia.com Award Nomination Enquiries Gavin Davids | +971 4 375 5480 gavin.davids@cpitrademedia.com

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Licensed by Dubai Development Authority

188 January 2022

MEConstructionNews.com

THE BUSINESS OF CONSTRUCTION

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Construction Influencer

KEZ TAYLOR, CEO OF ALEC, SHARES HIS THOUGHTS ON THE FUTURE OF DUBAI, THE LEGACY OF THE EXPO, AND THE URGENT NEED FOR CHANGE IN CONSTRUCTION ON THE COVER

Big Project ME speaks exclusively to ALEC’s Kez Taylor about the path ahead for the contractor and the wider construction industry MEConstructionNews.com @meconstructionn MEConstructionNews me-construction-news

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FEATURED

CONSULTANT

SAUDI PIF TO INVEST $266BN INTO NEW PROJECTS BY 2025

DP World and DRC ink agreement to develop deep sea port in Banana

CONSTRUCTION

Bahrain calls for bids for demolition of terminal at international airport

INSIGHT: Tantek 4D and the tallest modular-built high-rise in the world

CONSTRUCTION

Dar Al Arkan and Pagani unveil $217.8 million DaVinci Tower on Dubai Water Canal

CONSULTANT

PDC inks MoU with York for services at King Abdullah Port

CONSTRUCTION

EGA appoints new supply chain boss January 2022 | MEConstructionNews.com

ANALYSIS: Asset management can support privatisation across The Kingdom

Glad to see that Newcastle United’s new owners are not putting all of their eggs into one basket given the team’s current form in the English Premier League! But in all seriousness and staying on topic, this is an almost mind boggling number and story.

It is also an ambitious target even for the Saudi Public Investment Fund to get that $266 billion invested within the next four years - but it demonstrates the ambition of The Kingdom to make sure it stays on target for the structural and infrastructure work that it needs to stick to its Vision 2030 plan. I heartedly agree with the Serco assertion made elsewhere on the site that asset management must be taken seriously and will go hand in hand with attracting investment as the government begins to disentangle itself from many of its services and holdings through privatisation.

The recent regulatory framework saw a record boost in FDI this year and shorn up a weak-looking legal backline, but it will be mid-2022 until we really see whether The Kingdom is winning the promotion fight for investment.

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8

THE BRIEFING

Arbitration

The Calm Before the Storm MIDDLE EAST

Mark Raymont and Nesreen Osman of Pinsent Masons Middle East say that while the expected deluge of litigation and arbitration proceedings has not, so far, transpired, there are increasing signs that formal claims may be on the way for the Middle East’s construction sector January 2022 | MEConstructionNews.com

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hilst construction projects in the Middle East have been living with the effects of COVID-19 since at least January 2020, there are probably several different reasons for parties holding fire on starting court/arbitration proceedings, including: Lack of funds: Prior to the COVID-19 pandemic, projects in the Middle East were already suffering financially from low oil prices. The pandemic exacerbated the situation and led to even further strain on finances. Parties are therefore actively seeking to avoid - where possible - expending such cash as is available on chasing claims in

lengthy court or arbitration proceedings.

Lack of appetite: Analysing delay and disruption claims is not straightforward in the context of COVID-19 claims. There are many reasons for this including the way in which the various protective measures and restrictions were introduced by governments, regulatory authorities and project teams and the ambiguity as to the effect/scope of restrictions which has increased the challenges of establishing loss/ entitlements. In the circumstances, there has so far been a lack of appetite for commencing formal proceedings unless there is no other alternative.

Cultural norms of leaving claims to end of project: There is a tendency in the Middle East for claims to be left

THE BRIEFING

We expect to see an uptick in COVID-19 related construction claims going forward as projects directly affected by the pandemic move towards completion and attempts to use alternative forms of dispute resolution or to amicably resolve disputes that have been unsuccessful” until the end of a project. The usual driver for this is a desire to maintain good working relationships during project execution by avoiding contentious discussions regarding claims. It may therefore be the case that many of the COVID-19 claims have not yet reached the stage of formal proceedings as the projects have not been concluded.

COVID-19 is still ongoing: In many respects, the full effects of the pandemic and its impact on projects have yet to be seen. New variants can (and are) arising at any time leading to ever-changing restrictions in many jurisdictions.

COVID-19 is expected to remain a major issue affecting the Middle East at least until 2022/2023 and given the uncertainty, many parties whose works will continue to be affected are holding off from pursuing their claims in formal proceedings until the effects of COVID-19 have come to an end and can be identified and quantified.

However, the difficulty with all the alternative dispute resolution methods mentioned above remains the lack of an easily enforceable award or judgment at the end of the process. This is unlike court, where judgments are almost immediately enforceable, and arbitration, where parties can proceed to court and seek enforcement of their awards in the

event of a failure to comply. Accordingly, we expect to see an uptick in COVID-19 related construction claims going forward as projects directly affected by the pandemic move towards completion and attempts to use alternative forms of dispute resolution or to amicably resolve disputes that have been unsuccessful.

Before such formal proceedings are commenced, parties will need to weigh the prospects of recovery. This has inevitably led to a close watch on Governmentmandated guidance as to how COVID-19 claims are to be dealt with and also the approach of the local courts with regards to the applicable legal principles.

It goes without saying that the prospects of successfully prosecuting a claim for damages due to the pandemic will be heavily dependent on the terms of the relevant contracts and the applicable governing law.

However, based on our experience, certain themes are emerging. In particular,

Increased claims An increase in COVID-19 related construction claims are expected as projects directly affected by the pandemic move towards completion.

Few and far between Examples of courts in GCC jurisdictions applying local laws relating to force majeure and other legal principles relevant to the pandemic are few and far between at present.

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some GCC Governments have been proactive in issuing guidance as to how COVID-19-related claims should be addressed. A good case in point is the Kingdom of Saudi Arabia (KSA) where on 23 December 2020, the Supreme Court of Saudi Arabia issued Order no. M/45 of 8/5/1442 H. This provided a prescriptive approach to assessing claims under contracts affected by the pandemic and set out guidelines for assessing entitlement.

However, examples of courts in GCC jurisdictions applying local laws relating to force majeure (and other legal principles relevant to the pandemic) to construction related claims are at present few and far between.

In the UAE, the courts have traditionally taken a narrow approach to interpreting the extent to which Article 273 of the Civil Code (which operates where an unforeseen event makes performance of a contract “impossible”) might provide relief.

Based on the few cases that have been through the courts that are analogous to a pandemic claim, it seems that this approach is likely to continue.

Having said this, to the extent formal pandemic-related claims are made, the likelihood is that it will be in arbitration – the traditional dispute resolution forum favoured in construction contracts in the Middle East.

We would therefore expect that, whilst the approach of the courts will obviously be of some assistance in assessing likely entitlements, ultimately the particular terms of the construction contracts with regards to force majeure, change in law and related provisions will become a particular focus.

Whilst it is unlikely that there would be much argument that COVID-19, and the measures introduced to combat it, impacted on construction projects, the real battle ground going forward will be whether the effects fall within the scope of a contractual force majeure or change in law clause (although this will of course turn on the words used in the contract) or more general force majeure legal principles under local law. Watch this space!

This article originally appeared in Deloitte’s Powers of Construction 2021 report. Reprinted with permission of the authors and Pinsent Masons.

MEConstructionNews.com | January 2022

10

THE BRIEFING

Managing Construction on the World’s Tallest Modular High-Rise UNITED KINGDOM

Marion Bouillin of Bentley Systems reveals how Tantek 4D used SYNCHRO to manage the construction schedule for the world’s tallest modularbuilt high-rise in London

January 2022 | MEConstructionNews.com

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antek 4D is a digital engineering company headquartered in Ireland.

The family organisation provides a range of services within the architecture, engineering, construction, and operations industries, assisting clients with digital technology solutions from design conception through to project completion. They specialise in creating 4D digital simulations of pre-construction plans for the most complex projects across Ireland, the United Kingdom, and Europe.

One of their largest projects is a high-rise building on College Road in the Croydon section of London. The project will produce the tallest modular-built high-rise in the world with two towers: a 49-story tower (Tower A) and a 34-story building (Tower B)— including basements.

Tower A will include 817 co-living units while Tower B will include 120 residential units, a café, and community-use areas.

These buildings will provide much needed accommodation in the area, as

well as be within walking distance of several key areas and public transportation interchanges. Previously, Tantek 4D had worked with the client to deliver 4D simulation to an apartment complex and shopping centre. Having already worked with the client and these types of projects, they were entrusted with managing and delivering the complex construction planning for this project To ensure successful project delivery, Tantek 4D wanted to simulate the construction of the high-rise to test not only the robustness of the developed schedule, but also the completeness of the 3D models. They wanted to clearly demonstrate the construction sequencing of the 2,000 modular units being installed on both towers.

However, they needed to find software that could provide the visual capabilities and range of model interoperability required for this complex building. They also required software that would provide the highest 4D simulation quality while still allowing

THE BRIEFING

Project Summary:

Modular high-rise

Organisation: Tantek 4D Solution: 4D Construction Location: London, UK Project Objectives: • Manage construction planning of the world’s tallest modular-built high-rise.

• Create 4D digital simulations of pre-construction plans.

Products Used: SYNCHRO 4D, SYNCHRO Pro Fast Facts: • Tantek 4D’s latest project will include a 49-story tower and a 34-story building with basements.

• After seeing SYNCHRO successfully used by other companies, they turned to SYNCHRO applications.

• The team used SYNCHRO to create a 4D BIM model to visually demonstrate their plan.

• The 4D BIM model allowed Tantek 4D to increase productivity, improve safety awareness, and reduce the risk of time delays.

• By implementing SYNCHRO applications as part of their 4D BIM offering, they have increased their client base by 100% over the last year.

• Moving forward, they plan to integrate more SYNCHRO applications into this project.

importation of several 3D model formats.

Additionally, with a team of 10 employees working closely together, the software needed to allow for collaborative workflows with updates in real time.

At first, Tantek 4D tried other software but realised they were insufficient in meeting their needs.

After seeing SYNCHRO being used successfully by companies and reading various case studies, they turned to it to help solve their project challenges.

The team began by importing the data from their previous software into SYNCHRO. Since it is interoperable with many types of external software and accepts various file types, the process was streamlined and easy to complete. Once all the data was imported, Tantek 4D was able to assign resources and respective tasks to its team, thus effectively simulating the project.

The team used the technology to create a 4D BIM model that supports several aspects of the project, including sequencing of works, health and safety management, risk mitigation, logistics management, constructability analysis, and spatial planning. The model also

Improved performance The 4D BIM model allowed Tantek 4D to increase productivity by 15% while reducing accidents by 10% and project duration by 15%.

Technology adopter After seeing SYNCHRO successfully used by other companies, Tantek 4D turned to SYNCHRO applications to overcome the many project challenges.

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Total number of employees working on the simulation project

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helped them develop a crane lifting strategy, which would have been almost impossible to do without 4D technology due to the project site’s complex footprint and all the surrounding buildings.

Additionally, they were able to visually demonstrate this plan to stakeholders Network Rail and Transport for London, making it easier for them to understand the plan and make quick and efficient decisions. “Since utilising SYNCHRO 4D on all our 4D BIM projects, we have exceeded our clients’ expectations in terms of speed of delivery, accuracy of 4D simulations, and rendering quality of the final 4D simulation,” explained Conor Tansey, CEO and co-founder of Tantek 4D. “By using SYNCHRO on this project, we have identified and rectified several sequencing errors and have also been able to identify key areas where program acceleration could be achieved,” said Tansey. “The 4D model is also being used to visually communicate complex tasks and in safety inductions.” By communicating tasks in a highly visual way, they have increased productivity, improved safety awareness, and reduced the risk of time delays.

Because Tantek 4D implemented SYNCHRO applications as part of their 4D BIM offering, the organisation can now compete—and win—this type of work on a global scale. “By implementing SYNCHRO 4D into our business, we have increased our client base by 100% in the past year,” said Tansey. Moving forward, the organization plans to integrate more SYNCHRO applications into this project, which will allow them greater capabilities to monitor progress and optimise task completion.

Join us for an exclusive webinar with Bentley Systems Date: 8 February, 2022 Topic: The Construction Digital Twin – How to get time on your side Presenter: Paul King – director, Construction Solution Engineering Brief: Digital workflows and digital twin best practices improve efficiency, reliability, and cooperation to deliver meaningful and sustainable improvements in the industry.

Hear about current trends and learn how technology is enabling better projects.

MEConstructionNews.com | January 2022

12

THE BIG PICTURE

01 UNITED STATES

Siemens Smart Infrastructure acquires digital twins software from EcoDomus Siemens Smart Infrastructure has signed an agreement to acquire digital twin software for buildings from EcoDomus, a US-based company.

Siemens Smart Infrastructure explained that the move will help expand its digital building portfolio.

The EcoDomus software creates, maintains and visualises BIM-based digital building twins, making design and construction data available for building operations and maintenance.

03 TURKEY

02 ITALY

IVECO launches heavy duty truck line-up for Middle East IVECO announced its much-anticipated heavy duty truck line-up for the Middle East at a live at Dubai Autodrome.

The new off-road truck IVECO T-WAY and the on-road truck IVECO S-WAY were both revealed at a live European virtual launch at the beginning of June, but a series of dedicated days at the Dubai Autodrome was the region’s first chance to see and test the new IVECO WAY range.

The launch event included a dedicated test drive on an on-road and off-road track.

Turkey’s Folkart opens first international office in Dubai Folkart, the Izmir-based construction company and a reputable Turkish brand, has announced the opening of its first international office in Dubai.

In a statement, the firm said that its Dubai office precedes the launch of offices in Berlin and Cologne, where it has been working with partner companies to target the German market. The Dubai office opening was celebrated with an event that took place at the Mandarin Oriental Jumeira Hotel in Dubai.

04 REPUBLIC OF CONGO

06 SAUDI ARABIA

DP World and DRC to develop deep-sea port in Banana

Saudi PIF to invest $266bn into new projects by 2025

An agreement between DP World and the Democratic Republic of the Congo (DRC) will see construction of the country’s first deep-sea port begin within 12 months. The port will be located in Banana, along the country’s 37km coastline on the Atlantic Ocean.

The development of Banana Port will bring significant cost and time savings for the country’s trade, as it will attract more direct calls from larger vessels from Asia and Europe. It will also directly benefit the Congo Central province in terms of economic development.

January 2022 | MEConstructionNews.com

05 EGYPT

Egypt building 17 smart cities across the country The Egyptian Minister of Communication and IT has revealed that the North African country is building 17 smart cities that will be completely reliant on technology, a project that is part of an ambitious target to provide internet access to more than 58 million people over the next three years.

Amr Talaat said that the Egyptian government aims for to reach 25,000 villages across the country.

He added that Egypt is working on several projects to increase broadband coverage to remote and far-flung regions of the country.

Saudi Public Investment Fund (PIF), the Kingdom’s sovereign wealth fund, has revealed plans to invest up to $266 billion into new projects by 2025.

PIF Governor Yasir Al Rumayyan, during a speech at the Saudi Budget Forum said that the PIF has been instrumental in creating more than 400,000 direct and indirect job opportunities between 2017 and Q2 2021.

“The fund continues to achieve its goals for 2025, which are to pump $266.5 billion into new projects, and the volume of assets under management to reach $1 trillion.”

THE BIG PICTURE

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08 UNITED ARAB EMIRATES

First phase of $598m UAQ desalination plant complete 07 SAUDI ARABIA

Compass signs strategic partnership with Dar Al Arkan Compass Project Consulting has announced a strategic partnership with Dar Al Arkan, which will see the establishment of what’s billed as the Kingdom’s first integrated real estate development consultancy.

For the first time, a Saudi developer will be bolstering a regional project management consultancy, enhancing property acquisition, development and supervision offerings, a statement from Compass said.

The partnership will allow both parties to work together across the region, end-to-end, bringing in high return on equity and attracting top line projects.

Construction of the first phase of the Umm Al Quwain Water Desalination Plant has been completed. The project is being developed over an area of 250,000sqm area and will produce 50m imperial gallons per day (MIGD), while the total production capacity of the plant will reach 150 MIGD, once commissioned.

Based on Reverse Osmosis Technology, the project is expected to be commercially operational in Q3 2022. The project is being developed at a cost of $598m and has been implemented with high efficiency in delivering an environmental footprint.

09 UNITED ARAB EMIRATES

Masdar to develop 200MW solar PV plant in Armenia Masdar, the renewable energy company and subsidiary of Abu Dhabi-based Mubadala Investment Company, has announced the signing of an agreement with the Government of Armenia to develop a 200MW solar photovoltaic (PV) plant.

In a statement, Masdar said that the Ayg-1 project will be Armenia’s largest utility-scale solar plant. It will be developed on a design, finance, build, own, and operate basis and the project company will be 85% owned

by Masdar, with the Armenian National Interests Fund (ANIF), a governmentowned investment vehicle, holding 15%.

MEConstructionNews.com | January 2022

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THE BIG PICTURE

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10 EGYPT

12 SAUDI ARABIA

Aldar and ADQ consortium acquires 85.5% of Egypt’s SODIC

Masterplan for $20bn Jeddah Central Project unveiled

A consortium comprising of Aldar Properties and ADQ has announced that it will acquire approximately 85.52% of the outstanding share capital of The Sixth of October for Development and Investment (SODIC), following a successful mandatory tender offer.

The Abu Dhabi-based consortium, which is controlled 70% by Aldar and 30%

by ADQ, will focus on identifying growth opportunities and guiding the company’s long-term strategy. The consortium’s objective is to advance SODIC’s position as a leading national developer.

January 2022 | MEConstructionNews.com

11 BAHRAIN

Bids called for demolition of old terminal at Bahrain International Airport

Bids were opened on December 13 for a tender related to demolition works of the old terminal building at Bahrain International Airport (BIA).

The move is part of the ongoing modernisation programme of BIA. The scope of works includes demolishing the remaining portion of the existing terminal building along with all associated facilities. The request for proposals, issued

by Bahrain Airport Company, was open to approved building contractors for construction projects graded AA, A, and B.

The masterplan and main features of the Jeddah Central Project have been unveiled by His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Deputy Prime Minister, Chairman of the Board of Directors of the Public Investment Fund and Chairman of the Board of Directors of Jeddah Central Development Company.

The launch of the masterplan and main features envisions the creation of a world-class destination overlooking the Red Sea in the heart of Jeddah and will further strengthen the city’s economy.

18

THE BIG PICTURE

15

14 UNITED ARAB EMIRATES

13 UNITED ARAB EMIRATES

EGA appoints new supply chain and business development head Emirates Global Aluminium has appointed Simon Storesund to the newly-created position of Chief Supply Chain & Business Development Officer.

The move is line with an increased focus on strategic procurement and responsible sourcing. Storesund joins EGA from Norsk Hydro where he currently holds the position of SVP and head of commercial and business development in the Bauxite & Alumina business area.

He will be a member of the company’s executive committee.

Dar Al Arkan and Pagani unveil $217.8m luxury residential tower in Dubai Dar Al Arkan, a leading real estate company in Saudi Arabia and the GCC, has unveiled the DaVinci Residential Tower in Dubai in partnership with Italian hypercar manufacturer Pagani Automobili, known for its handcrafted production of ultra-limited-edition cars.

The launch of the $217.8 million development marks a significant milestone for both companies: Dar Al Arkan’s continued regional expansion by partnering with the world’s top luxury brands, and the world’s first ever Pagani-inspired spaces.

15 UNITED ARAB EMIRATES

Laith Haboubi appointed as COO of Dubai’s MCT Group Laith Haboubi has been announced as the chief operating officer for the MCT Group, a Dubai-based leading conglomerate operating in the construction and oil and gas industry in the GCC. Haboubi has joined the organisation with a mandate of strategically reviewing and managing the group to ensure its products and services are in line with the requirements of the market, while still maintaining the highest applicable international and regional standards.

He adds that the group will continue to focus on sustainability and efficiency.

17 JAPAN

16 OMAN

SEZAD launches artificial Artificial Coral Reef Project in Oman

In a bid to create an attractive habitat for fish and to provide a quality diving experiences for tourists and residents, the Special Economic Zone at Duqm (SEZAD) has launched the Artificial Coral Reefs Park project.

A 250m long pipe with artificial concrete blocks every other 10m has been deployed near Hamar Rock in the sea of Duqm.

Another similar pipe will be deployed as well in the coming days. The project aims to sustain the marine environment in the Zone and enhance its biodiversity.

Japan’s Mitsubishi Power ships three M701JAC gas turbines to Fujairah F3 power plant Mitsubishi Power has shipped a total of three M701JAC gas turbines to the Fujairah F3 power plant in the UAE from its Takasago Machinery Works in Hyogo Prefecture.

The plant will use an efficient combined cycle technology in the region and will be the largest natural gas fired gas turbine combined cycle (GTCC) facility in the UAE, playing a crucial role in the country’s power generation sector, while also contributing to the GCC’s power grid.

Mitsubishi Power is also dispatching engineers to provide support.

18 AUSTRALIA

Marr Contracting appoints Craig Goltz as operations director for global ops Marr Contracting has appointed Craig Goltz as Operations Director of its global operations, it has announced.

Based in Sydney, Goltz will assume responsibility for leading Marr’s Operations Team including the construction, works and yards, engineering, transport and logistics functions for the business.

Returning to Australia after more than six years working internationally in locations such as the Middle East, UK and North America; Goltz brings almost 40 years’ experience to the role.

MEConstructionNews.com | January 2022

16

MARKET REPORT

Industry outlook

Abu Dhabi Residential Market Review UNITED ARAB EMIRATES

As values stabilise for the first time in six years, Knight Frank’s Autumn 2021 report looks at the demand and supply dynamics of the Abu Dhabi residential market

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esidential values in Abu Dhabi grew by 0.1% in the three months to the end of September 2021, the first positive quarterly change since 2015, pushing average prices to AED 935 psf. Villa values (-0.8%) appear to be showing some signs of moderating after rising for nine consecutive months, taking the annual rate of change to 3.1%. Apartment prices on the other hand rose by 0.2% to a little under AED 1,000 psf, representing the first quarterly increase in seven years, delivering an annual change of 1.8%.

Despite the apparent quarterly outperformance of apartments, COVID-19 has driven structural changes in demand, with buyers preferentially seeking out larger

January 2022 | MEConstructionNews.com

homes, as evidenced by our 2021 Knight Frank Global Buyer Survey. Many house hunters are hedging their bets on an increased frequency of remote working and are committing to larger homes as a result that have provision for a home office and also outside space. It really is a case of bigger is better, as has been reflected in recent rapid off-plan villa sales projects in Abu Dhabi, such as Aldar’s 480-villa Noya Viva development on Yas Island, which sold out in 48 hours in April, or the more recent swift sale of all 83 villas at Saadiyat Reserve the Dunes.

POST-PANDEMIC BOUNCE FOR VILLA MARKET Indeed, villa price performance is also reflective of shifting buyer behaviour, with values climbing by 3.1% since the start of the pandemic. In contrast, apartment prices have remained virtually unchanged, rising by just 0.2%. Mirroring Dubai, overall residential values are still 29% down on the 2014 peak, with apartments trailing by 30%. Villas are about a fifth cheaper than they were in the 2014 peak. What’s interesting about the UAE capital’s residential landscape is that unlike Dubai, the rebounding of prices is far more evident at the low-mid tier segment of the market, particularly when it comes to villas.

Reem has seen some of the strongest growth amongst Abu Dhabi’s investment zones, with prices growing by 18.3% over the last 7 quarters and currently stand at about

AED 775 psf. Al Reef Villas, which are more affordable at AED 665 psf have grown in price by 11.2% over the same period. On Saadiyat Island (AED 1,400 psf), one of Abu Dhabi’s most prestigious and high-end submarkets, values have risen by a more modest 3.8%, but the area remains amongst the most expensive to purchase a villa in Abu Dhabi.

LIMITED SUPPLY PIPELINE Unlike nearby Dubai, Abu Dhabi’s committed pipeline of new residential supply remains limited, with just 16,400 units expected to be delivered before the end of 2025.

Indeed, the vast majority of that total is expected to be delivered before the end of 2022, with just 2,400 homes expected to complete between 2023 and 2025. While this total does not include land plot sales, which has become a stalworth of the Abu Dhabi market in recent months, it does highlight the fact that the villa market in Abu Dhabi, just like Dubai looks set to remain undersupplied, suggesting price stability.

In fact, of the 16,400 new homes likely to be built before the end of 2025, just 3,400 are villas, spread across six submarkets, including new-comer Jubail Island. The $1.9 billion development includes 400 villas in its first phase, 70% of which have been sold and are due to be delivered by 2024, while all villa plots have been sold and indeed growth in prices in this segment is likely in the short term.

Source: Knight Frank, REIDIN

500

0 Q3 2011

2021

2022

2023 Q3 2017

Q3 2018

2024 Q1 2019

Q3 2021

Q2 2021

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Q4 2019

AL REEF VILLAS

Q3 2019

Q2 2019

Q3 2021

Q2 2021

ALL RESIDENTIAL

Q4 2018

Q1 2021

Q4 2020

ALL RESIDENTIAL

Q2 2018

Q1 2018

Q4 2017

AL RAHA BEACH

Q2 2017

Q1 2017

Q4 2016

Q3 2016

APARTMENTS

Q2 2016

Q3 2020

Q2 2020

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021

APARTMENTS

Q1 2016

Q4 2015

Q3 2015

Q2 2015

SAADIYAT ISLAND

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

Q4 2013

Q3 2013

Q2 2013

Q1 2013

Q4 2012

Q3 2012

Q2 2012

Q1 2012

Q4 2011

Q1 2020

-5%

Q1 2011

500

Q2 2011

MARKET REPORT 17

AVERAGE RESIDENTIAL VALUES IN ABU DHABI 2009-2021, AED/SQF VILLAS

2,000

1,500

1,000

CHANGE IN AVERAGE RESIDENTIAL VALUES SINCE THE STARTOF THE PANDEMIC VILLAS

5%

0%

PRICE PERFORMANCE OF VILLAS IN ABU DHABI 2011-2021, AED/SQF REEM

2,000

1,500

1,000

DIMINISHING RESIDENTIAL SUPPLY 2021-2025, NUMBER OF UNITS

10,000

7,500

5,000

2025

MEConstructionNews.com | January 2022

18

ANALYSIS

Saudi Arabia

Magic Kingdom – The Outlook for Saudi Arabian Construction SAUDI ARABIA

David Clifton of Hill International takes an in-depth, exclusive look at the Kingdom’s construction industry for 2022 as it looks to deliver on the GCC giant’s ambitious plans

C

January 2022 | MEConstructionNews.com

losing the door on another slightly challenging year for the industry, 2022 offers further growth opportunities as the economy continues to recover from the pandemic. 2021 produced a significant bounce back for all of the GCC economies, although in terms of recovery to the levels last seen in 2019, we are still some way off.

The outlook for Saudi Arabia in general looks to be positive and this is driven in no small part by the construction industry, which is a significant contributor to the economy (see Figure 1). And with an ‘under construction’ and ‘in the pipeline’ total of almost $1.2 trillion

– of which c.$735 billion are in precontract, there are reasons to have a positive outlook for the short- and long-term future of the industry.

MACRO OVERVIEW

As with every country globally to impact in 2020 was incredibly significant to economic output. At this time, it is challenging to see how the Kingdom will return the 2018/19 level of GDP output given the growth forecasts.

The current expectations could be outstripped by a sustained high oil price. Although cognisance needs to be taken that outside of OPEC+ the USA shale oil productions comes on stream and profitable at between $50-55 per barrel. This should mean that with a

Positive outlook The positive outlook for Saudi Arabia has been driven, in no small part, by its construction industry, which has been a significant economic contributor.

7.5%

Expected rate of growth for KSA

ANALYSIS

budget of 1.045 trillion Saudi Riyals that fiscal balance is restored to the country outgoings. Given that Saudi Arabia also historically undershoots fiscal spending commitments (as a rule, not always), stability is expected in the government finances in 2022. Although this should be caveated that the current government expectation of growth in 2022 is 7.5% and our modelling suggest closer to 3% based on historical norms.

The last four years have been quite phenomenal in the Kingdom – for consultancy houses. It is telling that the rest of the supply chain have yet to see the downstream benefits of the programmes that the country is embarking on.

This is showing distinct signs of changing, although there are issues the industry must address in 2022 and beyond that we will highlight accordingly.

The next two years are expected to present significant challenges in the construction sector in KSA with imbalances and price volatility in the materials market as well as logistics - both in terms of costs and timings - in conjunction with the intent of the government to accelerate the materialization of the delayed mega projects.

Source: General Statistics Authority & Hill Assessment

INTERNATIONAL ENTHUSIASM

Whilst many of the international supply chain organisations are interested in KSA to a greater or lesser extent, there are the historical issues that the Kingdom has presented to the market – most significantly the main contractor supply chain.

The primary problems for engagement stand around fair and amical contracts, payment schedules, fair assessment of variations and payments of invoice sections not disputed when a submittal is issued. This makes engagement or reengagement challenging as the burden of trust will have to fall to the client body. This is quite separate to the complexity, location and thus the logistics addressed later for these schemes. Essentially, the possibilities are significant, although the risks are considered large.

19

FIGURE 1: CONSTRUCTION CONTRIBUTION TO GDP, 2018-2023 US$ BILLIONS

% GDP

TRENDLINE

$50

6.0%

$40

4.5%

$30

3.0%

$20

1.5%

2018

2019

INFLATION

As we’ve seen subsidies reign in or disappear in certain areas of the economy (e.g., fuel, electric and water), we have seen inflation average 3.6% in 2021, although the year commenced with up to 6% per month in Q1. We expect to see a more balanced inflation curve in 2022 as supply and demand starts to meet a greater level of parity.

Within the construction industry, we have seen inflation of c.7.5% in 2020 driven by a global material price surge of 32.5% year on year. The factors behind this being related to the supply and demand as businesses cut furiously in the pandemic to survive (the pandemic was different

2020

2021

In the pipeline Saudi Arabia has an ‘under construction’ and ‘in the pipeline’ total of almost $1.2 trillion.

3.6%

Average inflation in KSA for 2021

2022

2023

from the global financial crisis in that every country and sector partially closed, slowed down or shut down).

The estimated range for expected inflation in 2022 and 2023 is 1.6%2.8% and 2% -3% respectively. Clients and supply chain will need to be mindful of any ‘hype’ on project awards overheating the market. This is currently an unlikely scenario (as mentioned elsewhere), but dangers associated with the lessons learnt of Dubai in the mid-2000’s and counterproductive procurement models should be in mind.

If we just take rebar as an example, we ended 2021 with prices 72% up for landed goods compared to the start

MEConstructionNews.com | January 2022

20

ANALYSIS

FIGURE 2: SAUDI ARABIA GDP, 2011-2023 US$ BILLIONS

% GDP

TRENDLINE

$800

20%

$600

10%

$400

0%

$200

-10%

2011

2012

2013

2014

of 2020 (see Figure 3). This is certainly driven by China’s demand – dominating the demand side with 56% market share.

However, for 2022, we do see a softening of the futures market as prices decline due to major factors surrounding a China economic slowing and supply coming back swiftly on stream (see Figure 4). This is evident across most other material price points.

As an outline forecast for 2022, we expect: • Concrete prices normalise in 2022 and 2023 to c.2.5-3% per annum increases as local contract awards recommence their trend towards a historically normal level.

• We do not forecast steel sections to decrease significantly in 2022 and 2023.

• We expect cabling prices to stabilize

2015

2016

42.5% Loss of KSA workforce between 2017 and 2020

2017

2018

2019

2020

in 2022 as metal input prices level off and start to decrease thereafter.

• Labour inflation is expected at c.2% in 2022, based on potential scarcity. We don’t expect blue collar salaries to pick up, although white collar roles will see some upward trends based on skill sets.

As an industry 2022 inflationary pressure will be muted slightly by supply adjustments and clients already looking to lock in delivery capacity and supply at a certain price point, although we would expect construction to trend at a similar inflation level to wider economy.

INDUSTRY COMPOUND ANNUAL GROWTH RATE (CAGR)

Our assessment of the CAGR in the industry is c.5-6% for 2022 which is tempered against more

2021

2022

2023

bullish estimates due to a variety of factors that drive the modelling.

Firstly, there is a level of capacity constraint. The industry has seen the workforce (blue and white collar) in the Kingdom has contracted from 3,541,997 at the end of 2017 to 2,029,594 at the end of 2020. A loss of 42.5% of the workforce (source General Statistics Authority).

This is as a direct result of declining back log and pipelines in recent years, workers have been repatriated and this will take time to ramp up.

Secondly, constraints exist around the skill sets required to deliver some of these ambitious schemes and scarcity of individuals and products to deliver. As major projects have started to wind down from peak load, skilled individuals have departed.

Furthermore, because of the lack of

FIGURE 3: LANDED REBAR PRICES PER TON AND PERCENTAGE MONTHLY CHANGE, 2020-2021 US$ PER TON % CHANGE TRENDLINE

January 2022 | MEConstructionNews.com

Nov 21

Oct 21

Sept 21

Aug 21

July 21

Jun 21

May 21

Apr 21

Mar 21

Feb 21

Jan 21

Dec 20

Nov 20

Oct 20

Sept 20

Aug 20

-10%

July 20

$250

Jun 20

0%

May 20

$500

Apr 20

10%

Mar 20

$750

Feb 20

20%

Jan 20

$1000

ANALYSIS

overtly complex or mega sized projects being awarded in the past few years, larger, more complex companies in the supply chain don’t have the scale to service the market expansion as small, lower cost organisations have taken larger market share.

Thirdly, finance for the supply chain to ramp up should businesses wish to expand. The banking system has large exposures to the industry as a whole and with payment issues historically tying up supply chain cash, there needs to be an appetite to provide working capital or clients will have to increase mobilisation payments to ensure the ability to service their projects.

FUNDING

holding a level of resiliency, we look to the project types. Labour intensive projects have waned, whilst machine and technology heavy projects have more or less continued. This is especially notable in the Oil and Gas sector.

Moving into 2022, we see awards pickups to c.$35.6 billion which supports the CAGR forecast and contribution to GDP expectations. If all projects currently committed to be awarded in 2022, we would see an anomaly of over $50 billion in capital value, but historical trend analysis indicates this is unlikely due to a variety of constraints such us funding commitments, ‘red tape’ related to awards and unrealistic time frames for tender, negotiation and award.

Alternative funding KSA will continue to see a move towards more alternative sources of funding in the social infrastructure project market, David Clifton says.

$100bn KSA hopes to attract $100bn in FDI by 2030

Financing projects and attractive investors is critical to achieve or challenge the forecast CAGR. At this time, Foreign Direct Investment (FDI) is lagging behind the hoped for $100 billion by 2030 with only $5.5. billion in 2020 (compared to a target of $19 billion) and $1.4 billion into Q2 2021.

Having noted the challenge on FDI though, there is inherent interest from several foreign Export Credit Agencies (ECAs) to look at capital deployment or guarantees to support their export market and continue to build the political ties other G20 countries seek.

We expect to see greeter engagement

by ECAs as projects start to come out of design and towards main contract and supply chain awards as this is by far best way of building export content.

We will continue to see a move through to more alternative funding.

PPP style models are commencing movement. Traditionally utilised models such as Independent Water Plants (IWPs), Independent Power Plants (IPPs) and Independent Water and Power Plants (IWPPs) are certain to continue on there we engaged model. But as with Tatweer and the PPP school’s programme, we expect to a variety of social infrastructure projects move to market.

There are plenty of challenges facing the industry in the Kingdom for 2022 and beyond, but there are plenty of reasons to be optimistic about the opportunities ahead.

FIGURE 4: LME REBAR FUTURES CONTRACTS PER TON AND PERCENTAGE CHANGE, 2021-2023 US$ PER TON % CHANGE TRENDLINE

Jan 23

Dec 22

Nov 22

Oct 22

Sept 22

Aug 22

-1.5%

July 22

$600

Jun 22

0%

May 22

$650

Apr 22

1.5%

Mar 22

$700

Feb 22

3.0%

Jan 22

$750

Dec 21

Source: General Statistics Authority & Trading Economics, London Metals Exchange

CONTRACTING AWARDS

Over the course a prolonged period (7-8 years), Government sector direct contracts have typically made-up c.$20-25 billion of contracting awards in the Kingdom. The variations which typically move the awards into the $30-35 Billion range are the semi government and private sector.

There are major anomalies that occur at periodic times. These mega projects are often from the Oil and Gas sector, although major infrastructure such as Riyadh Metro cause significant increases in the awards structure.

As noted previously, the below graph demonstrates the fall off in project awards since 2015, with the exception of a major deviation in 2019.

In relation to manpower decreasing, but contribution of the industry to GDP

21

MEConstructionNews.com | January 2022

22

October 2022 January 2021 || MEConstructionNews.com MEConstructionNews.com

23

IN PROFILE

ALEC

Construction Influencer BIG PROJECT ME DISCUSSES THE LEGACY OF THE EXPO, AND THE FUTURE TRENDS OF THE REGIONAL CONSTRUCTION INDUSTRY WITH KEZ TAYLOR, CEO OF ALEC, IN A EXCLUSIVE, WIDE-RANGING INTERVIEW

MEConstructionNews.com | January 2022

24

IN PROFILE

year ago, at the start of 2021, Kez Taylor, the CEO of ALEC, outlined key trends for the regional construction sector, which he believed would help transform the industry into a healthier, more effective and productive ecosystem.

At the top of his predictions was that innovation would become a crucial part of the industry’s future, with technologies being deployed both onsite and offsite to increase efficiency and reduce risk. Another forecast was that communication between stakeholders would increase, greatly improving project processes and delivery. Finally, Taylor also highlighted that sustainability would garner attention from across the industry.

Over the course of 2021, it has become increasingly apparent that several of Taylor’s predictions have come to pass, in one form or another. A major focal point for these trends has been Expo 2020 Dubai. While a large percentage of the mega-event was completed, there was still a lot of construction work that

Building for the future Kez Taylor has set ALEC on the path to become a digitally-empowered and enabled contractor.

29,695 Total area, in sqm, of Alif - The Mobility Pavilion

needed to be done, and only a small window to finish it. As a result, there was a concerted attempt to adopt and introduce new innovations with the aim of speeding up the construction process while still delivering highquality work. Communication amongst stakeholders working to deliver the megaevent also showed the industry how to achieve amazing results in a coordinated manner. And of course, given the event’s key theme of sustainability, there has been a strong emphasis on the highest green building standards.

Therefore, with Expo 2020 well underway and Dubai’s economy on the upswing, Big Project ME sat

down with Kez Taylor to hear his thoughts about 2022 and discuss what he believes to be the pressing issues for the construction industry as it enters a new year and a new era.

“Everyone around the world has been through a pretty difficult period, but we’re quite fortunate here in the UAE that we’ve handled the pandemic exceptionally well. I think we’ve positioned ourselves really well moving into the future. With the Expo that’s going on in Dubai at the moment, I think a lot of people that might not have come out to the UAE and to Dubai, are going to come out and be amazed by this city, country and the Expo. A lot of very talented people are going to feel very welcomed here as it’s actually a great place to come and live, and it’s a great place to set up a business.”

Taylor adds that this expected influx of visitors and potential future residents, as well as Dubai’s continued focus on developing ‘future industries’, is going to create a positive bounce for the city’s construction and real estate sectors. In addition, with the city looking to become a manufacturing hub for the wider region and the world, he believes that there will be a significant change in the way the city is developed and grown.

“The growth sectors going into the future will be residential, while hospitality will also continue to grow. From a retail perspective, there’s a lot of supply at the moment, but it with population growth, then everything will go up,” he says.

You can either remain stagnant or move forward.

We’ve decided that we want to move forward. We’re going to make investments and look to the future because we want to be a leader in terms of where trends are going” January 2022 | MEConstructionNews.com

IN PROFILE

“Historically, the UAE has grown at about 100,000 people per annum. If we can get back to those kinds of growth trends, and if you look at forecasts in terms of economic and population growth, then the construction sector will have a good future and will keep growing.”

However, he warns that the changing dynamics in the market make it imperative that developers be smart and be in tune with future trends – particularly with regards to urbanisation.

“One of the global trends that is going on is urbanisation – more and more people are moving into cities, but cities are expensive to purchase and rent properties in. One of the advantages that we have in a city like Dubai is that people can actually be pretty close to

their place of work – in most cities around the world, there’s usually a pretty long commute to get in, and more and more people are being forced out of the cities (due to affordability).

“In Dubai, when it comes to urbanisation and affordability, we’ve got to look at how we can make things affordable for people. Let’s say for instance, micro-apartments, but with very good facilities and location and transport links. If we can develop those kinds of projects, then I think there will be massive demand for that type of thing.

“What happens with a lot of cities, if you look at town planning regulations, is that they are often not in tune with future trends. For instance, they’ll have minimum sized apartments that you’re

Expo legacy One of the legacies of the Expo is that it shows what can be achieved with better communication and coordination between stakeholders.

160

Alif features the world’s largest passenger lift, capable of holding 160 people

25

allowed to build, and they’ll specify that you have to have a parking bay for each apartment, and so on. Whereas the future trends are showing that people are actually moving away from owning vehicles and that they’re going from larger apartments to smaller, very well-designed spaces.

We’ve got to look at future trends and make sure that the regulations and the authorities are in tune with where we need to go, if we want to be a leading city or country,” Taylor asserts.

Given the emphasis that Taylor puts on being able to adjust to future trends, it comes as no surprise that ALEC has been at the forefront of change in the UAE’s construction industry. Not only has the company wholly embraced digitalisation, but over the course of MEConstructionNews.com | January 2022

26

IN PROFILE

the past year, it has signed several joint ventures and partnership agreements that will enable it to effectively compete and deliver on projects across the region.

These partnerships range from a JV with design-build industrial specialist BUTEC, which will target regional utilities, industrial and environmental sector projects, to a partnership with Hilti for a first-of-its-kind semi-autonomous construction robot. It has also signed an exclusive strategic agreement with the Norwegian-based MAT Filtration Technologies and MAT-KULING for land-based aquaculture, water treatment projects, and filtration throughout both the UAE and Saudi Arabia.

Furthermore, the company has recently launched a new subsidiary, LINQ Modular, which can manufacture factory-processed modular homes in less than two weeks, and be completed on-site in six to 10 weeks, in a sustainable and efficient process.

“You’ve got to keep ahead and in tune with future trends,” reasserts Taylor. “You can either remain stagnant or move forward. We’ve decided that we want to move forward. We’re going to make investments and look to the future because we want to be a leader in terms of where trends

January 2022 | MEConstructionNews.com

1,302.5 Size, in sqm, of the Saudi Pavilion’s LED mirror screen

are going, and we are positioning ourselves appropriately for that.

“We’re in a pretty tough market. We’ve been through COVID, and at the same time, we’re investing in future trends – which may work or may not, so there is a risk attached to that. But I must say, one of our values as a business is that we have courage, and courage means being bold enough and willing to make those kinds of moves, and we do believe in them. One of the things we’re looking at

is modular construction, and there are massive advantages to it. First of all, from a design point of view, you’re designing a product once and then you’re replicating it. From an energy efficiency point of view, there are a lot of advantages as well, in terms of speed of construction, building performance and quality. You can do it all in a controlled environment and ship to site anywhere in the world”.

However, in order to fully realise the benefits of modern construction methods, Taylor says that the region’s regulatory authorities need to be in tune with what the industry is trying to achieve, and that it is incumbent on the industry to exert its influence to make the change happen.

“If your rules and regulations say that you can’t innovate and transform things, then it’s pretty difficult to implement change, even if you have great ideas.

There’s a lot of influence that we, as an industry, can have on local authorities.

We at ALEC are working very closely with Dubai Municipality, who are very forwardlooking and innovative. We’re working with them on 3D-printed houses, as well as volumetric structural steel for residential and hotel projects that we’ll be able to implement here in Dubai, in the future.”

Taylor underscores his point by asserting that as a company, ALEC’s

IN PROFILE

purpose goes beyond just making a profit and improving efficiencies. He firmly believes that as one of the leading contractors in the region, ALEC must help transition construction towards an efficient and sustainable future.

“On the sustainability front, we as an industry have to transform. If you take cement as a product, the embedded carbon in producing cement is massive, and yet we use it all over the place.

We’ve got to come up with modern methods of construction that can actually gear us towards being net-zero carbon. There are lots of things that can contribute towards that, but modular construction is going to go a long way towards actually getting to that point,” he asserts, adding that achieving netzero carbon emissions is a real target for the contractor in the near future.

“We want to get there, but we’ve got to come up with metrics and measures that are common and understood by everyone.

I think there’s still quite a lot of work that needs to be done, but ultimately, what we have to be doing is influencing, whether it’s authorities, developers, clients, our supply chain, we need to influence and educate people about sustainability.”

Pointing to the Expo as an example of what can be achieved in the industry if it is working towards a single goal, Taylor says that the megaevent has helped prove that the construction ecosystem operates better if there is greater communication and clarity between

stakeholders, while the pressure of a fixed deadline makes decision-making quicker and more focused, as evidenced

by ALEC successfully delivering on 23 Expo projects, despite only getting a few months to complete some of them.

“The great thing about the Expo is that there is a deadline. It’s an event that has to take place and it has to be delivered.

We quite like working in that pressurised environment because decisions get made, things move forward, and you’re operating at a pretty rapid speed. We got given quite a lot of projects towards the end, where we were asked to come on and assist getting them across the

Successful delivery ALEC successfully delivered 23 Expo projects, despite the shorted timeframes and challenges facing them.

5

The Qatar Pavilion built in just five months

27

finish line, and we like that, where we’re delivering on time, being efficient, and working in that rapid environment.

“One of the real pities of our industry is the bureaucracy of the way we operate normally. For instance, if you ask a question, a contractor can say that he needs 14 days to answer it – that’s not good enough! On an Expo job, if you asked a question, you got an answer and you were able to resolve it and move forward pretty quickly.

“The bureaucracy and norms of our industry need to be shattered. That’s where our purpose around sustainability and efficiency comes from. These are things that drive us – we want to smash and get rid of those (inefficiencies). And we believe that Dubai and the UAE has the opportunity to be a leader in the process of how we deliver projects,” he enthuses, adding that this is a global issue for the construction industry, and one that needs to be focused on urgently in the local market as momentum generated by the Expo needs to be sustained.

“Unfortunately, I think there’s going to be a lot of reverting back to the norm (after the Expo), which is a real pity. What we’ve seen is that if we’ve got client and consultancy teams that work together and are decisive, then we can pretty much achieve anything as a collective. When we don’t have that, we struggle. Hopefully, through education and influence, we can get everyone to shift towards an efficient and sustainable future,” he concludes.

Historically, the UAE has grown at about 100,000 people per annum. If we can get back to those kinds of growth trends, and if you look at forecasts in terms of economic and population growth, then the construction sector will have a good future” MEConstructionNews.com | January 2022

28

| MEConstructionNews.com | MEConstructionNews.com September January 2022 2021

PROJECT PROFILE

29

Terra - The Sustainability Pavilion PROJECT NAME: Terra – The Sustainability Pavilion CLIENT: Expo 2020 Dubai MAIN CONTRACTOR: ASGC CONSULTANT: Turner TOTAL BUILT UP AREA: 56,000sqm VALUE: $206.9 million

A Building for the Future of Earth ASGC REVEALS HOW IT DELIVERED EXPO 2020 DUBAI’S MOST EYE-CATCHING AND ICONIC PAVILION: TERRA – THE SUSTAINABILITY PAVILION, DESPITE SEVERAL CHALLENGES AND A HUGELY COMPLEX DESIGN MEConstructionNews.com MEConstructionNews.com| |January August 2022 2021

30

PROJECT PROFILE

or any visitor to Expo 2020 Dubai, there are a handful of few key pavilions at the site that classify as ‘must visits.’ These pavilions are amongst the most iconic and eye-catching at the mega-event and often form the centre point around which certain themed districts are built.

One such pavilion is the massive Terra – The Sustainability Pavilion, a 29,159 square metres pavilion that acts as the primary anchor for the Sustainability Zone of Expo 2020 Dubai.

Built across a broadly triangular plot that is 180 metres long by between 75 metres and 200 metres wide, the pavilion has been built to showcase the mutual co-existence of architecture alongside a sustainable future.

Dynamic in its form, Terra has been built from the ground up with sustainability as its guiding principle, and aims to not only educate and delight visitors, but also serve as a demonstration building and a destination where science and the public intersect.

The contractor tasked with delivering this iconic project was

January 2022 | MEConstructionNews.com

ASGC, and Bassem Ezzat Ayaad, the project director, says that the Dubai-based construction giant was responsible for carrying out all the works related to the Sustainability Pavilion, including concrete works, internal finishings, main canopy structural steel, solar photovoltaic panels, the Energy and Water Trees, and the exhibitions themselves.

“The project was awarded to us on 28/02/20218 and we commenced construction on 14/04/20218,” he tells Big Project ME. “The tendering process was very challenging due to special and specific materials and the systems requirements for the

Value engineering More than 270 changes were made to the project over its lifecycle as part of ASGC’s value engineering exercise.

18 Energy

trees can generate 4GWh of energy per year

project. A lot of coordination was required with the supply chain and with specialist subcontractors.

“During this period, there was a Comprehensive Value Engineering exercise to achieve the client’s budget, while maintaining the same levels of technicality on the project. ASGC was chosen as the main contractor based on its proven history of delivering successful landmark projects that have enriched the social infrastructure of Dubai. Projects such as Mohammed Bin Rashid Library, Etihad Museum and the Coca Cola Arena were delivered on time, achieving the desired level of satisfaction,” Ayaad explains.

During this process, more than 270 changes were made to the project over the course of its lifecycle and cost savings of $16.8 million were achieved, he reveals, adding that these changes included the design of the canopy photovoltaic system being changed without affecting the power capacity; modifying the design of the E- and W-Trees without reducing their capacity; replacing the architectural concrete with Precast but still having the same finish; replacing blackened steel with aluminium; modifying the façade design; and many more.

“Huge efforts were put into the engineering stage of the project to ensure the efficient and reliable implementation of this unique design,” Ayaad says. “Constructability in such projects is always a major concern, but with effective collaboration between stakeholders, such projects become a reality.”

These other stakeholders were Expo 2020 Dubai – the Employer; Emaar – the Development Manager; Turner Construction International – the Project Manager; Grimshaw Architects – Main Consultant; Al Shafar United – the MEP Contractor; Buro Happold – the Structural and MEP Consultant; ACCIONA Cultural Engineering and Al Shafar Interiors – the Fit-Out Contractors; Rice Perry Ellis and Partners – the Architect of Record, he outlines.

Furthermore, due to the complexity and scale of the project, a number of ASGC Group resources were

PROJECT PROFILE

Construction Challenges:

Canopy Ring Beam • 792 bolts fixed on 36 steel plates • Each bolt is 2.5 m long and 60 mm thick • Circular reinforcement with 32 diameter bars • Accommodation of steel plate within 8 to 10 layers of reinforcement in both top and bottom with 2 mm tolerance was a huge challenge • Erection of bottom shutter and pouring concrete with all 792 bolts penetrating it was also a huge challenge

Construction Challenges:

Canopy Structure • Installation of 36 ribs of varying sizes in three months • 4,000 tons of structural steel • 600-ton mobile crane used to erect the structural steel • Tight project deadlines lead to offsite fabrication of canopy steel and ring beam.

• Adverse climatic conditions like high winds lead to regularly halting of cranage operations.

Construction Challenges:

Photovoltaic Panels • 12,500 sqm of PV panels of varying sizes • Erection using 3 tower cranes with restricted access • Manufacturer’s other commitments affecting delivery required 20+ visits to Germany by key persons to monitor and ensure the timely delivery • Logistics from Germany to Dubai factory for assembly then to site was a serious logistical challenge

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Construction Challenges:

Exhibition Fit-out • Major design changes made multiple times requiring changes to already installed Electromechanical works • Due to COVID-19 travel restrictions, programmers from European countries did not visit the site for 6 months • Serious disruptions to installation work in closed environment due to COVID-19 positive cases causing suspension of works multiple times

Huge efforts were put into the engineering stage of the project to ensure the efficient and reliable implementation of this unique design” MEConstructionNews.com | January 2022

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PROJECT PROFILE

deployed on the project, including Emirates Beaton – Ready Mix Concrete; ASU – MEP works; ASI – exhibition and auditorium works; Hard Block Factory – concrete blocks.

Technology was used extensively to deliver the project and to ensure that all the stakeholders were kept informed and up to date about progress, ASGC says, adding that 4D BIM, drones and digital integration were cornerstones of the project.

However, the team use of technology on Terra wasn’t limited to just the aforementioned, but also incorporated Augmented and Virtual Reality, which were deployed to make working on the complicated project much easier for the onsite team.

“Once we receive any 3D model at any stage of the project, we review it using VR or AR headsets, where any visible discrepancies or clashes can be detected in advance, before developing the 3D model level of detail and alternatives can be explored in advance,” the contractor tells BPME. “Also, we send the updated 3D model to the site, so that they will always have a real glimpse of how the project will look like, understand the scale and better planning of the ahead

In Numbers:

Environmental Initiatives • In collaboration with Dubai Municipality, ASGC took part in Environmental Awareness Campaigns • Waste Segregation & Recycling was practiced (Beyond Project Target) • Daily Briefing of Waste Segregation at Source • Training Conducted for Construction, Logistics, Supervision Team and Workforce

• At Source Waste Segregation Sturdy Tubs • Colour Coded Bins for Sites and Offices • Recycling the Plastic Waste and Converting into Eco Clothes • Hazardous Material Storage Arrangements and Spill Kit Training • Delivering Toolbox Talks and Knowledge Shares • Total recycled waste from site is 93.3%

tasks. In addition, we will create a virtual mock-up using Virtual Reality and replace the physical mock-ups in some projects, so that our clients have more flexibility to choose, edit and review. This saved a good amount of time and money for the project.”

In addition, Operation Dashboards were used to help represent project information in an efficient manner, with the latest information accessible from any device and from any geographic location. GPS tags were used for all Operator Driven Assets to provide real-time tracking and records of all the assets for the ASGC Group.

Keeping in line with Expo 2020 Dubai’s commitment to the health and safety of the workforce, ASGC deployed extensive measures to ensure that key targets were achieved on site. As a result, zero man-days were lost during the 34-month construction period, while 7.5 million safe manhours (in key features) were achieved, despite there being more than 50+ subcontractors working under ASGC on the project, totalling more than 11,000 different people across its entire delivery cycle.

“One of the greatest achievements by the Sustainability Pavilion Team was to achieve 7,525,030 LTI-free safe man

The Sustainability Pavilion is not just a name – the project targeted a LEED Platinum certification, as well a Platinum Sa’fa certification from Dubai Municipality” January 2022 | MEConstructionNews.com

PROJECT PROFILE

hours,” Ayaad asserts, highlighting the efforts taken by the team to deliver the project to the highest HSE standards.

Obviously, the COVID-19 pandemic caused a major disruption to the construction schedule and delivery of Terra, but Ayaad points out that thanks to the planning and coordination systems already in place, the team was able to over this significant challenge.

“ASGC, being a construction conglomerate, owns most of its supply chain, which in fact reduced the risks related to material delivery and possible delays. With respect to health, we enforced emergency policies and procedures for both the staff and the workforce. Strict thermal scanning on a daily basis, regular deep cleaning routines, face masks, hand washing stations and sanitisers are available all the time on site and in the office. A custom made remote working policy was also introduced, wherever possible, so as to provide flexibility and business continuity with minimal physical interaction. All of these examples, along with many other precautions, were taken in line with governmental regulations and protocols,” he explains.

Other COVID-related challenges encountered were issues like travel from Abu Dhabi being restricted for up to three months, causing the suspension of work for several key trades. In addition, travel restrictions from European countries delayed the programming works by six months.

Coupled with this were issues with several specialist subcontractors who refused to continue work citing the COVID-19 threat, while sustainability consultants were unable to review submittals and site inspections for as long as six months, he adds.

As the name indicates, sustainability is the bedrock on which Terra is built, and as such it has achieved the highest available accreditation for sustainable construction – LEED Platinum. This rating has been granted due to the ingenious design and layout of the pavilion, which features a host of eco-friendly innovations designed to showcase the structure as the very peak of sustainable architecture and construction.

4,912

Solar panels installed on the canopy and energy trees

Eco-friendly design Terra’s LEED Platinum rating was achieved due to its ingenious design and layout.

One such innovation is to have most of the pavilion underground so that it utilises less energy and optimises the utilisation of air conditioning due to free airflow and natural cooling, the contractor says.

“There is a very organic way in which the whole pavilion keeps changing its paths of walking around, and it is a 100% barrier free design.

The overall circulation of paths keeps taking you inwards to showcase the core and direct you to an outer path where you zoom out to see the overall elevation of the structure,” it adds.

Further strengthening Terra’s sustainability credentials is the fact

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that ASGC and the project team managed to recycle 93.3% of total waste generated during construction.

Once the Expo ends, the pavilion itself will be recycled and turned into a centre for science and for children.

“The Sustainability Pavilion is not just a name – the project targeted a LEED Platinum certification, as well a Platinum Sa’fa certification from Dubai Municipality,” says Ayaad. “By default, the design of the project, the technologies used, as well as the materials selection, had to be in line with such targets. Terra’s 130-metrewide main canopy is covered with more than 1,000sqm of photovoltaic panels capable of generating up to 4GWh of electricity yearly. It is coupled with 18 energy trees that surround it, which are capable of tracking the sun’s movement for maximum solar harvest.”

“The Sustainability Pavilion is part of Expo 2020 Dubai’s legacy.

When you factor the size of the works done and compare it with the small to mid-sized country pavilions around the Expo site, the difference is clearly felt. It has been built for years to come – not only as a remarkable landmark, but also as a cultural hub.

This has been reflected on the size and complexity of the construction stage when compared to the other temporary pavilions which are not part of District 2020,” he concludes.

MEConstructionNews.com | January 2022

34

SHOW PREVIEW

WFES

WFES to showcase clean energy innovations MIDDLE EAST

Event from January 17 – 19, 2022, will bring together world leaders from government, technology and energy sectors to showcase clean energy solutions

T

he World Future Energy Summit will be held between January 17 – 19, 2022 at the Abu Dhabi National Exhibition Centre (ADNEC) as part of Abu Dhabi Sustainability Week, the prestigious, sustainability-focused global platform hosted by Abu Dhabi Future Energy Company “Masdar”.

The Summit will host innovations from around the world, as well as international technology pavilions from Germany, Switzerland, Italy, Netherlands, France, Austria, Nigeria, India, Japan, Korea, China.

Following COP26, where global economies are expected to layout

plans for decarbonisation the World Future Energy Summit will enable the brightest minds in the business to meet, exchanging ideas and showcasing new innovations that will support the development of a sustainable future.

World Future Energy Summit is perfectly timed, especially as the GCC begins to diversify its energy mix and a regional charge on use of renewable energy sources. In the region, more countries have committed to building major infrastructure projects that significantly reduce reliance on fossil fuels, with green hydrogen generation projects emerging as the crown jewel of these efforts.

In Oman, plans are underway to build a $30bn plant that will be the world’s largest green hydrogen production facility at its completion.

The plant is expected to be at full capacity in 2038, powered by 25GW of wind and solar energy.

Further north, Saudi Arabia’s high-tech coastal city of Neom is the site to an equally proactive effort in the race for green hydrogen production, as Air Products and its partners work to deliver a $7bn renewable energy-powered green hydrogen-based ammonia production facility by 2025.

Furthermore, the United States plans to investment an additional

January 2022 | MEConstructionNews.com

$550 billion in clean energy, with China having already issued green bonds with a value of $154.7 billion.

In the UAE, Masdar aims to develop with its partners Siemens Energy and Marubeni a green hydrogen demonstrator plant at Masdar City.

Masdar’s parent company Mubadala, alongside Abu Dhabi National Oil Company (ADNOC) and holding company ADQ, also agreed earlier this year to form a hydrogen alliance to produce green and blue variants of the fuel.

In Dubai, the first solar-driven green hydrogen production facility in the MENA region has already been inaugurated, with a total investment of $11 million.

The pilot project will produce 20.5kg/hour of hydrogen at 1.25MWe of peak power, in line with the Dubai Clean Energy Strategy 2050 and epitomising the public-private partnerships widely viewed in the industry as the most efficient way to move forward.

The Energy Expo will be vital in accelerating this already fast-paced industry. The Energy Expo will host some of biggest names in renewable energy, including TAQA, EDF, ENGIE, and EWEC as exhibitors.

The Solar & Clean Energy Forum will host industry leaders as speakers and panellists,

including Bruce Stedall, Asset Management Director, Transco; Dr Emmanouil Kakaras, Executive Vice President Next Energy Business at Mitsubishi Heavy Industries EMEA; Mothana Bahjeat Qteisha, Senior Managing Director, MEA & APAC, Jinko Solar amongst others.

Capitalising on this undeniable momentum is extremely important for bold, forward-thinking investors, and Grant Tuchten, Group Event Director for World Future Energy Summit, said the Energy Expo & Forum will be beneficial for anyone in attendance. “Renewable energy is the central focus of the exhibition” he remarked, “where government officials and decision makers are together with the engineers and scientists who are developing exciting new technologies to facilitate business discussions resulting in beneficial partnerships.

The World Future Energy Summit, organised by RX Middle East, will be held at the Abu Dhabi National Exhibition Centre (ADNEC), from 17 – 19 January 2022. The event is hosted by Masdar as part of Abu Dhabi Sustainability Week and will comprise a series of high-profile events addressing current global challenges and the means with which the world can cooperate to build a sustainable future for everyone.

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EXPERT VOICE

Voltas

A Step in the Right Direction MIDDLE EAST

AR Suresh Kumar reveals how Voltas has been at the vanguard of the digital technology revolution for the MEP sector

A

s technology becomes increasingly commonplace in the construction industry, the Mechanical, Electrical and Plumbing (MEP) sector is one that could considerably benefit from its uptake. Given the scale and complexity of its projects,

ensuring accuracy and efficiency is key to its success, which is why adoption of technology has become critical for the sector’s future.

One company that has actively pursued technology and attempted to keep itself ahead of the curve is Voltas Limited, the Indian-owned MEP engineering solutions provider.

Speaking to Big Project ME, AR Suresh Kumar, vice president and head of the International Operations Business Group for Voltas, reveals how the company is moving the needle forward for MEP. How has Voltas adapted in the wake of the pandemic?

In the UAE, construction was identified as one of the critical sectors and fortunately, was allowed to continue its operations.

This posed a challenge and an opportunity for Voltas to bolster its leadership position in the market.

January 2022 | MEConstructionNews.com

Guided by our business ethics, the safety of our employees and partners was of paramount importance. At the same time, we committed to our customers for the timely and high-quality delivery of our projects. The year 2020 was a difficult one for everyone. There was little award of projects and customers were cautious. Oil prices dropped with little demand for the same.

In 2021, as more people around the world got vaccinated, businesses began to improve their performance. Oil prices recovered and more projects began to get awarded in the region. Voltas built a healthy order book and the business gained momentum again. Challenges continue as most materials are sourced from outside; costs have increased, and supply chain challenges are there. While the company has

been able to mitigate some of it, we have had to absorb some other costs to ensure successful and timely project deliveries.

The adoption of technology has become even more important, and Voltas has been an early adopter.

Things are likely to continue in the digital way. The UAE government played a big role in managing the pandemic very well and this has also helped businesses recover well.

How has the industry kept pace with the ongoing digitalisation of the construction sector?

Is it ahead or behind the curve, in your opinion?

Traditionally, the construction sector has been a laggard in the adoption of technology. To quote a report

by McKinsey & Company in 2016, construction has been better than only agriculture and hunting in its digital adoption journey. This says a

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FOR MORE INFORMATION Please visit the Voltas website at: www.voltas.com lot about the sector and the kind of potential that exists in this space.

Talking about the Middle East region specifically, construction is one of the key sectors here and employs one of the largest work forces. Some of the best Project Management companies and Consultants have a significant presence here. One would imagine that all these factors would have contributed to the steep adoption of technology in the sector. Instead, the adoption of technology has been slow and only in certain pockets.

While scheduling and planning tools like Primavera and MSP have almost become a norm, technology has not been able to permeate through the construction sites as much as one would have imagined.

However, the pandemic and resulting shrinkages in margins have forced the industry to be efficient for survival. It has accelerated innovation and furthered the use of more technologies to get work delivered in a more efficient and cost-effective manner.

While organisations like Voltas – which is part of a larger group, had reasons to ‘Go Digital’, many of the ‘pure contracting’ firms were reluctant to travel the same route due to budget constraints, hardware limitations, lack of understanding, along with leadership limitations. This is restricting the digitalisation rate of the industry.

Engineering: More investment in BIM hardware has been made, extensive trainings are given to ensure its true adoption.

Procurement: The entire procurement process is managed digitally. Right from the sourcing platform to tracking procurement progress using advanced dashboards, it is end to end digital.

Construction: Right from equipping foreman with Tabs to using RIFD for tracking workers ensuring their safety, Voltas has been on the forefront of digital transformation. The company uses an integrated planning software which is linked to the tabs the foremen input the data in – it then flows into advanced Dashboards to track project progress in near real time thereby enhancing the quality and timeliness of decision making.

We are having a core team currently working on innovation and digitalisation that keep us benchmarked with best in class with other product and process industries and thereby bringing the digital revolution to the construction industry.

What does a digitally enabled future look like for Voltas?

The pandemic and resulting shrinkages in margins have forced the industry to be efficient for survival. It has accelerated innovation and furthered the use of more technologies”

The company being early adopters has invested a lot in the digital journey in the first phase. In the next phase, the company will look to continue and enhance the tools being used to deliver more efficient and cost-effective solutions to customers. Other companies are also expected to begin / improve their digital journey as it has now become almost a necessity with both clients and vendors beginning to adopt digital in a big way.

The progress made so far is only a step in the right direction. This industry offers endless opportunities in automation and digitisation through innovation and key stakeholder engagement. With more and more projects coming up with shorter timelines, combined with the fact that traditional skill labour markets are drying out, the industry should come out of the conventional ways of working and adopt newer techniques and digitisation.

Engagement with software developers, tool and instruments manufacturers, plant and machinery vendors are increasingly required as the construction industry is fast moving towards a hybrid model of ‘manufacturing and site installation’.

What is Voltas doing in the digitalisation sphere and how it is utilising technology to become more sustainable and efficient?

We have been amongst the few companies to adopt technology at every stage of project monitoring and execution. The journey began almost four years ago when we collaborated with consultants to set up a Centre of Excellence and kick start our digital journey.

Now, almost all project management from planning to execution is done through digital platforms thus almost eliminating the need for paper.

MEConstructionNews.com | January 2022

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COMMENT

Industry insight

ANDREW SKUDDER RIB CCS

The future of AI and mixed reality in construction in 2022

W

ith ever-evolving technologies, the future is looking bright, and the future of construction is no exception.

What we have seen over recent years is a surge in technological advancement - from things as simple as digitisation of records to more complex things like Building Information Modelling. With these advancements comes the opportunity for optimisation of productivity and profitability.

So, let’s take a closer look at two of the technologies with the most potential for this optimisation: mixed reality and artificial intelligence (AI). We’ll cover what they are, how they’re used, and the benefits they pose for the construction sector in 2022.

Mixed reality refers to the merging of real and virtual worlds. Virtual reality and augmented reality are, in essence, “mixed” to create the mixed reality. For example, using glasses or a screen, you can see the real world with digital elements or information.

It takes augmented reality one step further by allowing the user control over the real and virtual elements in an environment and allowing them to interact.

So, you don’t just see the digital elements and real ones at the same time. You can merge the two. This creates the mixed reality wherein the world you are seeing

January 2022 | MEConstructionNews.com

is neither real nor digital; it is both.

Mixed reality can, of course, be used in a construction setting. Think of the vision you have for your construction site. Previously, 3D models and physical plans could help you to envision what things would look like.

Now, with mixed reality, you can see and experience it, and even adjust it in real time.

Using special glasses, people can make changes to their construction plans, and experience a world where their vision comes to life.

What’s great about using a mixed reality view on your construction site is that you can pick up on problems you wouldn’t be able to see through the use of normal 2D blueprints and planning.

Your proposed elements are all digitised, and you can see how they would coexist with reality.

The future of mixed reality in a construction setting, then, is a bright one.

We’ve all heard of artificial intelligence, and we know that it is being integrated into almost every sector in the world these days. AI, in a nutshell, is the use of a machine to do certain tasks that would previously have needed a human’s input.

AI is performed through the use of a ‘smart machine’. For a general example, think of simple record logging. Instead of manually logging each bit of information, you can use AI to do it for you.

AI is a way to make things go faster and to alleviate human workload, and it’s evolving and developing every single day.

There are multiple benefits to using artificial intelligence. It can improve crucial things like safety and allow your teams the time to focus on the things that AI can’t do. It helps managers and workers alike by supporting them and making their jobs easier.

The future of AI is exciting, as we are constantly seeing new developments and improvements. In 2022, expect to see it emerging even further.

It’s clear that 2022 and years to follow will see a big surge in technologies like AI and mixed realities. Because the construction sector is so big (and so important), you can expect to see these developments embraced.

After all, technology plays a big role in our world today and there are multiple ways it can benefit this specific industry.

Andrew Skudder is the chief executive officer of RIB CCS.

DONAVAN ELLIS SERCO

Asset management supports KSA privatisation efforts

D

riven by Vision 2030, a wide range of government entities in the Kingdom of Saudi Arabia are looking to privatise their organisations with the ultimate goal of diversifying revenue sources away from a reliance on oil. In a move that will further stabilise the Kingdom for future generations, privatisation will enable the country to continue to grow exponentially through income generation from new sources.

Privatisation is no small task; it demands a broad range of activities to be completed in order to ensure that operations of these entities are profitable, making them attractive to foreign investors and driving growth.

Like any transaction, the entity looking to privatise and find foreign investment must in the first instance be an attractive proposition, enabling potential investors to conduct their due diligence and be confident that their capital is well placed.

A key aspect of this resides within asset management, and the following outlines the various steps that need to be considered.

Each government entity that seeks to privatise must have a clear and definitive view of the assets under its ownership, their condition, cost to maintain and prospective lifecycle.

Having a clear link between the performance of your assets and bottom line

COMMENT

provides potential investors with a clearer view on the investment that they are about to make, their confidence enhanced by the transparent view of risk associated with the operations, maintenance and longterm reliability of the assets in question.

Though there have been operations and maintenance contracts in place for assets owned by these entities, it is unlikely that the latest in asset management principles has been implemented. The potential risk this poses is high, as the operational cost of assets may hinder the future profit generation of the entity in question.

Like any other aspect of business, the lower the cost associated with asset maintenance and lifecycle, the less the company has to take from its revenue to cover it, therefore improving the profit margin. A company with poorly maintained assets and an inaccurate view on their condition, longevity and potential operational costs makes for a risky – and unlikely – investment opportunity.

From the investor’s perspective, it is then essential that those government entities that wish to privatise seek the expertise of an asset management company to ensure that asset registration, asset condition is accurately recorded, monitored, maintained and improved and that a clear view of potential operating cost is available.

By investing in this process as early as possible, entities seeking privatisation can create both short and long-term value in their organisations in addition to mitigating the risks for investors associated with the

Privatisation is no small task; it demands a broad range of activities to be completed in order to ensure that operations of these entities are profitable, making them attractive to foreign investors and driving growth”

purchase of assets with unknown condition and potential lifespan, this process can also help clients contribute toward smart city strategies, reducing their carbon footprint and realising a range of opportunities to optimise energy consumption.

The sooner that this is done the better, as the historical view provided by periodic audit will further reduce the risk associated with investment; trackable and traceable data surrounding asset condition will further instil confidence that the projected lifespan and operational costs are accurate.

Over and above the creation of auditable asset data is the adherence to international standards and compliance that will provide government entities with an additional feather in the cap when seeking foreign investment to support privatisation activities.

By aligning asset management policies, procedures and activities with recognised international standards, government entities can more easily convey to investors their commitment to quality and compliance whilst adding further credence to the data that they have collected.

Foreign investors can easily recognise attribution to the latest in asset management and financial business practices, again building further confidence that their due diligence prior to investment will return an even smaller level of risk.

Foreign investment is critical in supporting the privatisation activities of the Kingdom of Saudi Arabia. In doing so, diversification of the revenue streams within the Kingdom will mitigate the reliance on oil which, in the long term, will eventually become a much smaller source of revenue than it is now.

Ensuring that assets are correctly categorised and maintained in a manner that improves their value whilst reducing their operational costs is paramount in driving the value of a business seeking privatisation.

Early adoption of the latest in asset management principles will accelerate the privatisation process, building confidence in foreign investors and achieving the privatisation targets of the Saudi government efficiently.

Donavan Ellis is a digital asset management consultant at Serco.

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MATTHEW SEXTON SAY STUDIO

Resimercial gains momentum as employees return to work

F

lexible working has taken the forefront in businesses, ongoing restrictions are still causing teams to be dispersed, a major new trend comes from the need to design the Hybrid Office. We have seen a shift from workplace to “culture space.” Employees will increasingly be working a hybrid office, moving between a home-work space and a traditional office building. The latter will become primarily a culture space, providing workers with a social anchor, facilitating connections, enabling learning, and fostering unscripted, innovative collaboration.

With working from home, employees are becoming naturally accustomed to a more casual approach to their working days. This is mirrored in both the physical space and within company culture and patterns of behaviour. They have been given access to an unprecedented amount of choice and can control when, how and where they work and will want this to continue. People will now be looking for a workplace that feels and looks more like a home-from-home.

This combination of residential and commercial design features – resimercial – isn’t a new concept at all and is a design trend that has been gaining momentum for a number of years and its appeal has gained momentum since employees were obliged to work from home.

Matthew Sexton is managing director at SAY Studio.

MEConstructionNews.com | January 2022

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TENDERS

Middle East tenders UAE RESIDENTIAL

Silver Springs Cluster TERRITORY Al Hebiah Third, UAE CLIENT DAMAC Properties BUDGET $100 million DESCRIPTION The project's scope of work involves the construction of 46 villas located in Al Hebiah Third at Silver Springs Cluster.

COMPLETION 30/03/2024

construction of a sports club at Al Qasmiyah University.

COMPLETION 30/12/2023 INFRASTRUCTURE

RESIDENTIAL

Sports Club Al Qasmiyah Univerity (Plot No. 43) TERRITORY Sharjah, UAE CLIENT Qasmiyah Univerity BUDGET $20 million DESCRIPTION The project's scope of work involves

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 30/12/2023

Al Quoa Main Reservoirs & Irrigation Mains Upgradation TERRITORY Al Quoa, UAE CLIENT Abu Dhabi General Services PJSC (Musanada) BUDGET $35 million DESCRIPTION The project's scope of work involves the upgradation of main reservoirs and irrigation mains in Al Quoa, Al Ain. The project also includes installation of irrigation line, discharge line, installation of pipelines and associated facilities.

COMPLETION 30/12/2023

SAUDI ARABIA HEALTHCARE

Sulaiman Al Rajhi University Hospital TERRITORY Qassim, Saudi Arabia CLIENT Sulaiman Al Rajhi Colleges

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INFRASTRUCTURE

BUDGET $255 million DESCRIPTION The project's scope of work consist of a 9-storey hospital building located at Buraydah, Qassim, Saudi Arabia.

It includes a development area of 85,000 square metres.

COMPLETION 30/12/2024 ENERGY

Renewable Energy Program (Round 3) Saad 300 MW Solar Plant TERRITORY Saad, Saudi Arabia CLIENT Renewable Energy Project Development Office BUDGET $410 million DESCRIPTION The project's scope of work involves the construction

Amaala The Triple Bay Infrastructure Works TERRITORY Red Sea, Saudi Arabia CLIENT Amaala BUDGET $50 million DESCRIPTION The project's scope of work involves the construction of roads, pavements, stormwater drainage network, irrigation network, wadi crossings and associated facilities at The Triple Bay on the north-western coast of the Red Sea, Saudi Arabia.

COMPLETION 30/12/2024

OMAN MIXED-USE

Oman Gate TERRITORY Al Seeb, Oman

MEConstructionNews.com | January 2022

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TENDERS

CLIENT Bin Al Sheikh Holding Group BUDGET $320 million DESCRIPTION The project's scope of work consists of a mixed-use development located at Al Seeb, Muscat, Oman. The project also includes a 9.7 hectares waterfront plot, Omani-themed bazaars and heritage outlets, a marina for yachts and leisure crafts, restaurants and cafes.

COMPLETION 30/12/2024 HEALTHCARE

Central Public Health Laboratory TERRITORY Al Seeb, Oman CLIENT Oman Ministry of Health BUDGET $70 million DESCRIPTION The project's scope of work involves the new Central Public Health Laboratory in Al Seeb, Muscat Governorate, Oman. The scope of work covers construction of Main Laboratory Building 1: The Main building of RCC structure with a total built up area of approximately 14,802m2 .

The building consists of ground, first floor, second floor and technical floor (third floor). The

a component of a Retail at the ground floor level.

COMPLETION 30/12/2023

total plot area for the construction of CPHL is 40,000m2 .

COMPLETION 30/06/2024 OIL & GAS

ENERGY

Crude Oil Storage Facility for Daleel Petroleum Company

Alba Solar Power Plant

TERRITORY Al Dhahirah, Oman CLIENT Daleel Petroleum Company BUDGET $205 million DESCRIPTION The project's scope of work involves the construction of a crude oil storage facility located at Block 5, Al Dhahirah, Muscat, Oman. The production capacity of the storage facility is 629,000 barrels of oil. The scope of work includes two storage tanks with a capacity of 50,000 barrels each, laying of piping, pump house, installation of safety and security systems, filtration system and associated facilities.

COMPLETION 30/12/2025

BAHRAIN RESIDENTIAL

Al Ramli Housing

Development (Plot No. 4) TERRITORY Salmabad, Bahrain CLIENT Eskan Bank BUDGET $27 million DESCRIPTION The project's scope of work consists of 4 residential buildings each comprising 10 floors above 3 storey parking podium located at Salmabad, Bahrain. The project also includes car parking (2 per each apartment) and retail area of 1,152 square metres. The project featuring a total of 300 apartments all of which are 3 bedroom apartments divided as 160 units of 3 bedrooms apartments and 140 units of 4 Bedrooms apartments, with

TERRITORY Bahrain CLIENT Aluminium Bahrain (Alba) BUDGET $50 million DESCRIPTION The project's scope of work involves the construction of a 5MW solar power plant ay Bahrain. The work comprises surveying, designing, engineering, supplying of solar panels, civil and structural work, testing and commissioning and also tying the grids. Minimum 350 W photovoltaic panels are required for covering a surface area of around 37,000 sq m spread over operations areas, car parks and the Alba Club. The project supports the social, governance and environmental policies of the company and will assist in shifting towards renewable energy for the company.

COMPLETION 30/12/2025 HOSPITALITY

Bahrain Marina Shangri La Hotel TERRITORY Bahrain Marina, Bahrain CLIENT Bahrain Marina Development Company BUDGET $125 million DESCRIPTION The project's scope of work consists of a hotel located in Bahrain Marina, an integrated mixeduse development in Bahrain.

The 5-star hotel offering 250room luxury hotel rooms, 150 one- to three-bedroom suites, eight beach chalets and 21 waterfront villas. The project will also include extensive recreational and meeting facilities, five restaurants, a rooftop lounge, a private beach, January 2022 | MEConstructionNews.com

TENDERS

two outdoor pools, health club and spa, a kid’s club and a 1,038 square metres ballroom.

COMPLETION 30/12/2025

QATAR

BUDGET $75 million DESCRIPTION The project's scope of work involves the construction of an academy, administrative spaces, parking facilities and associated facilities at Sidra in Qatar.

COMPLETION 30/03/2024

INFRASTRUCTURE

Marina District Cooling Plant (Phase 1) TERRITORY Lusail, Qatar CLIENT Marafeq Qatar BUDGET $80 million DESCRIPTION The project's scope of work involves the construction of an existing district cooling plant with added capacity, new thermal energy storage tank, installation of water cooled centrifugal chillers and associated facilities in Lusail city of Qatar.

COMPLETION 30/12/2023 EDUCATIONAL

Qatar Academy - Sidra TERRITORY Sidra, Qatar CLIENT Public Works Authority (ASHGHAL)

COMMERCIAL

Qatar Central Bank Office Building & Data Centre TERRITORY Doha, Qatar CLIENT Qatar Central Bank BUDGET $25 million DESCRIPTION The project's scope of work involves the construction of a 3-storey with 4 basements office building, 8-storey

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Complex Building and associated facilities of the Al Mawani Corporation in Kuwait.

COMPLETION 30/12/2024

data center and associated facilities in Doha, Qatar.

COMPLETION 30/12/2023

INFRASTRUCTURE

KUWAIT

Sheikh Salem Al Sabah Camp 132kV Overhead Lines

INFRASTRUCTURE

Qurtuba Infrastructure Works (Phase II) TERRITORY Qurtuba, Kuwait CLIENT Kuwait Ministry of Public Works BUDGET $50 million DESCRIPTION The project's scope of work involves the construction of roads and infrastructure works in Qurtuba, Kuwait.

COMPLETION 30/03/2024 COMMERCIAL

Al Mawani Complex Renovation TERRITORY Kuwait CLIENT Kuwait Ports Authority (KPA) BUDGET $40 million DESCRIPTION The project's scope of work involves the rehabilitation of the Al Mawani

TERRITORY Mutlaa, Kuwait CLIENT Kuwait Ministry of Electricity & Water BUDGET $125 million DESCRIPTION The project's scope of work involves the construction of a 72 km of new 132kV double circuit, three phase overhead transmission line from RDTN ‘W’ substation to proposed Kathma ‘B’ 132/11kV substation in Mutla’a area using sing ACSR Zebra conductor per each phase of 400 sq.mm, 16km of one new 132kV double circuit overhead transmission line between existing Kathma ‘A’ substation and proposed Kathma ‘B’ substation using single 400 sq.mm nominal area ACSR Zebra conductor per phase and one OPGW conductor and associated facilities.

COMPLETION 30/03/2024

MEConstructionNews.com | January 2022

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PROGRESS REPORT

Final update

Ellington Properties tops out Harrington House Developer says residential project in Dubai’s JVC will be delivery in Q4 2022

E

llington Properties, the Dubai-based design-led property developer, has announced the topping out of its new residential property, Harrington House, which is located at the heart of Jumeriah Village Circle, in just a few months of its launch.

In a statement, the developer says that Harrington House was developed in partnership with Asem Holding. It has been launched to

January 2022 | MEConstructionNews.com

strong investor response in September 2021 and is scheduled for delivery in the fourth quarter of 2022.

Ellington adds that the topping out construction milestone was achieved on schedule, underlining its commitment to timely delivery.

The project has been inspired by the Arabian desert with colour and design inspirations reflecting natural beige and black shades. It is an integrated community that focuses on the health and wellness of residents.

Joseph Thomas, Co-Founder and Managing Director, Ellington Properties, says: “Assuring a tranquil and healthy lifestyle environment, Harrington House has received strong response from investors for the long-term returns it offers, given its

Commitment to delivery The topping out construction milestone was achieved on schedule, the developer said.

92

Total number of apartments in the project

central location, exceptional design, and state-of-the-art amenities.

Harrington House has only 92 apartments, comprising of studios, one-, and two-bedrooms across four residential floors. It offers easy access to the leisure and business hubs of the city, with Downtown Dubai and Dubai Marina only 10 to 15 minutes away and DWC Airport only 10 minutes by road.

A central two-storey courtyard with a dramatic external wood staircase serves as the heart of the project’s social hub, with and outdoor seating area connected to a pool deck and a Zen Garden. Other amenities include a resort-style swimming pool, a fully equipped gym with zoned training areas as well as an eco-friendly and Montessori inspired kid’s play area.

Towards a Carbon-Neutral energy future We are advancing the world’s energy system to be more sustainable, flexible and secure. As the pioneering technology leader, we collaborate with customers and partners to enable a sustainable energy future – for today’s generations and those to come.

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