Big Project ME August 2018

Publication licensed by Dubai Production City

149

AUGUST 2018 meconstructionnews.com

THE BUSINESS OF CONSTRUCTION

heart of the city

Big project me gets an exclusive first look at one Za’aBeel with ithra duBai

Contents

Issue 149 August 2018 07

12

16

26

40

42

16 Gradual declines

40 Low-carbon development

06 MEConstructionNews.com OnlIne

The biggest stories from Big Project Middle East’s home on the web

AnAlysIs

Asteco report analyses the state of the Dubai property market as rental and sales prices fall

susTAInAbIlITy

Abdulla Al Nuaimi explains why it’s crucial to support low-carbon developments in the UAE

07 Emaar to raise funds with sales 18 KEF-Katerra

42 The Big 5 Construct Egypt

10 L&T wins $437m in contracts 26 Centre of the City

44 Top Tenders

12 Dubai hospitality market focus 36 Robots are here to stay

48 Managing variations and profit

The bIg pIcTure

Emaar looks to raise $1.4bn in funds through the sale of non-core assets InTernATIOnAl news

Indian contractor wins deals in building and factories sectors in Oman and other countries MArkeT repOrT

Property Monitor provides an outlook for Dubai’s hospitality real estate market as occupancy rates decline due to oversupply

In prOfIle

Faizal Kottikollon and Ash Bhardwaj discuss how the new entity will change construction sITe VIsIT

Big Project ME is invited for an exclusive tour of the One Za’abeel construction site rObOTIcs

Suhail Arfath of Autodesk says the use of robots will continue to grow as technology catches up with the needs of builders

shOw preVIew

Big Project ME previews The Big 5 Construct Egypt ahead of its September launch in Cairo Tenders

Big Project ME lists the Middle East’s biggest construction tenders for August 2018 lAsT wOrd

Graeme Braybrooke examines how variations play a major role in the success or failure of a construction project

August 2018 1

Introduction

One to watch

I

conic buildings often become synonymous with the cities they’re in. When you think of New York City, you think of the Empire State Building; when you think of London, you think of Big Ben; when you think of Paris, you think of the Eiffel Tower.

At present, the building that dominates the Dubai skyline is of course the Burj Khalifa. However, Emaar is already working on surpassing it with The Dubai Creek Tower in Dubai Creek Harbour, while there are others in the planning and design stages.

However, while this month’s cover feature may not be the tallest building, it certainly has the potential to be the most eye-catching as it has one of the most distinctive designs in the world. Not only is One Za’abeel going to have the world’s largest cantilever running between the two towers, it will also be built around a fully functional bridge that is a major thoroughfare for the city.

While this project is wildly ambitious from an engineering point of view, it also presents a clear example of how architects and designers can best use the space available to them.

As the city continues to grow at pace, the space available to developers will shrink, forcing a rethink about how projects are designed and built.

To me, the One Za’abeel project is an example of how we can build projects in a congested space.

I think the industry will learn many lessons from how Ithra Dubai and the project team are working on One Za’abeel, and that we’ll continue to see its impact on the architectural landscape of Dubai long after it’s been completed.

4 August 2018

GROUP MANAGING DIRectOR RAZ ISLAM raz.islam@cpitrademedia.com +971 4 375 5471 eDItORIAL DIRectOR VIJAYA CHERIAN vijaya.cherian@cpitrademedia.com +971 4 375 5472 eDItORIAL eDItOR GAVIN DAVIDS gavin.davids@cpitrademedia.com +971 4 375 5480 SUB eDItOR AELRED DOYLE aelred.doyle@cpitrademedia.com ADVeRtISING cOMMeRcIAL DIRectOR JUDE SLANN jude.slann@cpitrademedia.com +971 4 375 5714 DeSIGN

As we come into the second half of the year, I’d like to remind you again that there are a number of major events coming up for both Big Project ME and ME Consultant. We will be holding the Value Engineering Summit on September 5, and we’ll also be holding our first ever Women in Construction networking event on September 24. The third edition of the ME BIM Summit is scheduled to be held on October 28, followed by the ME Consultant Awards on November 19, and finally, the Big Project ME Awards on November 26 to close things out.

I’m already a little exhausted after typing that out, but it’s going to be worth the effort, so make sure to lock in the dates in your calendars!

simon.cobon@cpitrademedia.com DeSIGNeR PERCIVAL MANALAYSAY percival.manalaysay@cpitrademedia.com PHOtOGRAPHY

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MAkSYM PORIECHkIN CY

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Licensed by tECOM to registered company, CPI trade Publishing fZ LLC whose registered office is 207 – 209, Building 3, Dubai Studio City, Dubai, UAE

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Online

MOST POPULAR

REAdERS’ COMMENTS

FEATUREd

CONSULTANT

$1bN WARNER bROS. WORLd AbU dHAbI INdOOR THEME PARk INAUgURATEd

Emaar to sell hotels, clinics and schools as it looks to raise $1.4bn in funds

While the rest of the world sees Dubai as the main tourist destination in the UAE, I am always stressing to my friends that live outside the country that there is so much to do if you are willing to go further

CONSTRUCTION

than that city’s beaches

ANCG $204m contract wins include ‘leading’ airline HQ

and malls. It amazes me that some residents have rarely ventured out into the desert or mountains. I

Video: Shaping the Future of Construction

by World Economic Forum

would also argue that Abu Dhabi has its own charms and over the past few years it has opened theme

CONSTRUCTION

parks and museums that

Emaar to develop Middle East’s largest Chinatown

match anything that Dubai offers. More of this please!

Proud AD resident WHY RESIdENCY LAW CHANgES ARE A POSITIVE FOR dEVELOPERS

Absolutely agree with everything being said here!

CONSTRUCTION

We got onto the property

DEWA starts testing new turbines at M-Station expansion project

ladder several years ago and although we had to jump through some hoops at the time, it has been worth every dirham! I also run an international company based in JAFZA and this will make it easier to attract new talent and importantly we’ll have less turnover

PROPERTY

BinGhatti says UAE-China talks will boost FDI in UAE 6 August 2018

Feature: Ready for new challenges – Hamish Tyrwhitt interview

and hold onto our talent.

Name withheld by request

The Big Picture

Strengthening the balance sheet Experts say the sale of non-core assets is about raising capital to strengthen the balance sheet.

Emaar to raise $1.4bn via asset sales

Developer to sell hotels, clinics and schools as part of plans to raise capital Dubai developer Emaar Properties has said it is planning to sell hotels, clinics and schools as it looks to raise $1.4bn in funds through the sale of non-core assets. Citing senior sources, a Financial Times report said Emaar was closing in on a deal with several interested parties. Dubai’s real estate sector is one of its main economic drivers, but has been hit hard by a slump in regional demand following a fall in oil prices since 2014.

“This has to be about raising capital to strengthen the balance sheet,” said a banker quoted in the FT report. “This is not the market environment you would want to sell assets in if you were being opportunistic.”

In a statement, the developer said it “regularly considered various financing options to

streamline its business”, adding that it was looking to raise about $700m through the sale of its hotel portfolio, except for two prime properties. Emaar is also looking to sell clinics and schools across its communities at a prospective value of $700m, the FT report added, with Standard Chartered Bank hired to carry out the sale process.

In an interview with CNBC Arabia on July 17, Mohamed Alabbar acknowledged that Emaar Hospitality Group would sell part

of its portfolio to focus on hotel management, and that the unit was still looking to list its own shares. He added that this could be possible within four years.

“It is the start of expanding into the hospitality sector,” Alabbar said. “We have to focus on the issue of management and hotel management contracts, like other global brands such as Hilton and Marriott.”

He did not confirm which properties would be sold or specify the amount the company

$700 million Amount Emaar is looking to raise through the sale of its hotel portfolio

plans to raise. He also did not put a timeline on when the sales would happen, or if there were any interested buyers.

In addition, Emaar has announced that it is developing the Middle East’s largest Chinatown, in the retail district of the developer’s Dubai Creek Harbour mega project. Timed to coincide with the visit of Chinese president Xi Jinping in July 2018, the announcement said the retail precinct would occupy a central location within Dubai Creek Harbour.

Emaar also said it would open three dedicated pavilions in China – in Beijing, Shanghai and Guangzhou – as part of efforts to promote tourism, education, investment and trade links between the UAE and China.

August 2018 7

The Big Picture

No opportunity to respond Khaldoun Al Tabari has refuted claims that he and his daughter owe $272m to DSI and has denied any wrongdoing, impropriety, negligence or incompetence, adding that he was not given an opportunity to respond to the internal investigation by DSI.

Khaldoun Al Tabari refutes DSI claims

Former CEO denies owing the troubled contracting firm $272 million Khaldoun Al Tabari, former CEO of Drake & Scull International (DSI), has denied any wrongdoing after it was reported last week that he and his daughter Zeina Al Tabari, who served as a senior executive at the company, owe the contracting firm up to $272.3m.

Citing sources close to the matter, Bloomberg had previously reported that DSI had reached the conclusion following an internal probe conducted in June. The news service has subsequently published a statement from Khaldoun Al Tabari denying that he and his daughter owe money to DSI and claiming that they acted within the law and in the interests of the contractor.

“I refute in the strongest terms any suggestion that I or my daughter owe Drake & Scull International PJSC (DSI) any money at all,” Al Tabari, who 8 August 2018

“I refute in the strongest terms any suggestion that I or my daughter owe Drake & Scull International PJSC (DSI) any money at all. I was given no opportunity to respond to the supposed internal investigation”

stepped down from his role as CEO in 2016, noted in his statement. He further denied that the previous management of DSI was guilty of any wrongdoing, impropriety, negligence or incompetence, adding: “I was given no opportunity to respond to the supposed internal investigation by DSI.” The initial report said the findings of an investigation had been passed to the UAE authorities. It also alleged that an order had been issued by Abu Dhabi’s public prosecutor and that “the central bank asked lenders to freeze accounts belonging to Al Tabari and his family”.

Following the news, the share price of DSI rose to 72 fils but has since receded and is currently at 69 fils at the time of going to press.

On 11 June, shares in DSI were worth 1.16 dirhams; they were as high as 2.24 dirhams in

January after the firm announced it had successfully completed the restructuring of its corporate general bank debt in the UAE, and that it had secured new credit lines and working capital facilities for its ongoing and new projects portfolio.

The Dubai construction and engineering contractor achieved an overall net profit of $1.9m for Q1 2018, compared to a net loss of $228m during the same period in 2017. Overall revenue was $188.6m, compared to $216m in Q1 2017.

The company also reported a gross profit of $27.49m, compared to a gross loss of $13.34m in 2017.

The Q1 operating profit was $12.25m, versus the operating loss of $221m reported in the previous year, the company added.

DSI’s total project backlog was $1.47bn, supported by $83m worth of projects secured – primarily in the UAE – since January 2018.

The Big Picture

Bechtel to train KSA female graduates

Construction giant aims to increase women’s participation in Kingdom US-based global construction giant Bechtel has launched a women’s empowerment programme in Saudi Arabia which will focus on increasing women’s participation in the country’s workforce.

Working with Al Khaleej Training and Education, Bechtel will look to ensure that women are trained and that those with undergraduate degrees are placed in the right jobs, said country manager Abdulrahman Al Ghabban.

“Bechtel’s partnership with Al Khaleej Training and Education is grounded in 75 years of our commitment to Saudi Arabia and its people,” he said.

“Together, we are supporting the country’s Vision 2030 goal to increase women’s participation in the workforce to 30%.

“The Bechtel team in Saudi Arabia is honoured to be part of this visionary effort in the country that is such an important part of our company’s 120-year history.”

Al Ghabban added that this was not the first workforce enhancement programme that Bechtel has carried out in the region, with the company starting a partnership with the Riyadh College of Technology in 2017 to train and hire up to 75 students once they had graduated from the college.

Those graduates received work experience at a Bechtel project in Saudi Arabia, along with a three-month programme which included practical training that would allow them to develop and improve their professional skills.

The Women’s Empowerment programme includes training courses in English language, information technology and computer skills.

The first group of candidates are expected to begin training this autumn, a company statement said.

Bechtel has worked in Saudi Arabia for 75 years, developing landmark projects that have transformed the country.

Major infrastructure, industrial and energy projects include development and expansion of Jubail and Ras Al Khair Industrial Cities, working with the Royal Commission of Jubail and Yanbu, King Khalid and King Fahd international airports in Riyadh and Dammam, and overseeing a major phosphate complex and industrial city for the Saudi Arabia Mining Company, Ma’aden.

The construction firm is currently working on lines one and two of the six-line Riyadh Metro and providing programme management services at Jubail Industrial City, the largest civil engineering project in the world.

“Together, we are supporting the country’s Vision 2030 goal to increase women’s participation in the workforce to 30%. The Bechtel team in Saudi Arabia is honoured to be part of this visionary effort in the country that is such an important part of our company’s 120-year history”

Training and placement Bechtel’s programme, in conjunction with Al Khaleej Training and Education, will look to ensure that Saudi women are trained and those with undergraduate degrees are placed in the right jobs.

August 2018 9

The Big Picture

4

1. H3 Dynamics HolDings launcHes new ai tool for HigHrise inspections H3 Dynamics Holdings, a Singaporean firm, announced the launch of H3 Zoom AI, a new cloud-based and AI-enabled services platform that can connect with camera drones to offer a safer, faster and more accurate alternative to dangerous, difficult-to-reach or mass-scale maintenance inspection activities. With a first focus on smart cities, H3 Zoom will launch Façade Inspector, a visual inspection tool that uses machine learning and drones to inspect and maintain building facades.

With an increase in inspection frequency as the number of high-rise buildings around the world continues to grow, H3 Zoom’s Façade Inspector aims to address the scalability challenge by introducing a fully digitised process that can scan a highrise building within minutes instead of weeks, while avoiding obstacles and improving worker safety. The AI engine will be able to sort through thousands of HD images and billions of pixels to precisely identify, qualify and localise different types of defects, which are then represented through interactive inspection reports, the company said.

10 August 2018

$511m

Hill International has been awarded a contract by Gremi International to provide project and construction services for a $511m ecoresort in Brazil

2. inDia’s l&t wins contracts wortH $437m in builDings anD factories business Larsen & Toubro (L&T), a leading Indian engineering and construction company, said its construction unit has won contracts worth $437m in the buildings and factories business, including work on a tourism facility in Oman. In a statement, the Indian construction giant

said the order from a client in the sultanate will see L&T deliver MEP services, structural work, architectural finishes and external development services.

In addition to the Oman project, the company has also won orders from the southern Indian state of Andhra Pradesh, including a contract to build the tallest government office building in India. Andhra Pradesh Capital Region Development

Authority (APCRDA) has awarded L&T the engineering, procurement and construction (EPC) contract for the Head of Department office buildings at Amaravati, Andhra Pradesh, the statement said, adding that the mega project would be the first Steel Diagrid project in India and the first to be built in combination with the Automatic Climbing Formwork System (ACFS) and Diagrid.

The Big Picture

580km

Vladimir Putin has instructed the Russian government to work out a plan to construct a 580km bridge connecting Sakhalin Island to the mainland

2

3

23%

1

BIS Oxford Economics predicts that Australia’s housing starts are set to fall by almost 23% by 2020

3. contractor requireD for $435m crossway east africa project Sydney-based funding consortium Crossway Capital is calling for contractors with a strong track record to bid on a $435m 20,000-bed student accommodation project in East Africa.

Due to the location of the project, Crossway’s normal Lloyds of London-backed insurance wrapped project

finance (IWPF) structure will need to be supported by grant and guarantor agencies.

Crossway said it is confident that a contractor demonstrating the required strong balance sheet or contracting track record will help get the project off the ground.

“While the country itself can be regarded as stable, it is not economically strong enough yet to achieve a proper credit agency rating, which naturally affects the financing structure,”

said David Rose, UK-based EMEA senior associate for Crossway. “But to meet the standards required by grant and guarantor agencies, we need a contractor that can demonstrate an established track record in projects at this level, in Africa if possible. Crossway can provide the full capital requirement with the necessary guarantees, or the project can be funded with a mix of grant and guarantor participation.”

4. green tecHnologies merges witH teD jacob engineering group Ted Jacob Engineering Group and Green Technologies have announced the merger of the two companies, effective from June 18, with Green Technologies becoming part of Ted Jacob Engineering Group.

Established in Canada in 1997 as Green Technologies Inc, the company was subsequently established in Dubai in 2004 as Green Technologies FZCO. Since then it has led the implementation of sustainability and LEED in the Middle East, delivering 665 LEEDcertified buildings to date, a statement from TJEG said.

As a specialist consultancy, it has provided engineering services ranging from retrofitting of existing buildings to improving energy efficiency and operating performance, design and retrofitting of district cooling plants.

“The merger of Green Technologies into Ted Jacob Engineering Group will greatly expand and augment our team’s ability to provide excellent service to our customers, and incorporate its expertise and specialisation in sustainability and implementation of LEED and Net Zero Energy design,” TJEG said in a statement about the merger.

August 2018 11

Market Report

DUBAI HOSPITALITY mArkeT FOCUS: 2018-2020

Property Monitor report provides an outlook for the Dubai hospitality real estate market segment as occupancy rates decline due to increased supply

Overall occupancy rates increased by 0.5% in Dubai during 2017, predominantly due to expected supply not entering the market and an increase in recorded guest numbers.

However, as of Q2 2018, increases in supply of 4% have outpaced demand increases of only 1.7%, resulting in a 3.9%

decrease in average occupancy levels. Dubai average daily rate figures for the period of January to May 2018 are showing a 4.0% fall versus the same period in 2017.

Although the rate of decline is slowing, it is expected that declines will continue as additional supply enters the market.

Luxury operational performance Operational performance in the luxury segment has remained resilient despite heavy pressure on all department revenue streams. Cavendish Maxwell has analysed the trading performance of a group of luxury positioned properties, over 30% of which are described as resorts. Resort properties typically have very

different cost structures to those of a city hotel tower positioned in the luxury sector. As the value of a hotel asset is intrinsically linked to the profitability, it is important to understand how certain properties are performing in order to provide accurate forecasts.

Undistributed operating expenses include all expenses

“At the end of 2017, the Department of Tourism and Commerce Marketing (DTCM) reported a total hospitality inventory of 107,431. As of the end of Q2 2018, the total inventory has increased by 4% to 111,743�

12 August 2018

Source: STR, DTCM, Property Monitor

Increased supply in the market Increases in supply of 4% and demand increase of only 1.7% in 2018 have resulted in a 3.9% decrease in average occupancy levels.

Market Report

Occupancy rates

ADR

Dubai Standard

YTD occupancy changes

Dubai Standard

77.2% 0.5%

AeD

Dubai Luxury

Dubai Standard

677 3.9%

Dubai Luxury

73.6% 1.2%

AeD

Dubai Luxury

1258 1.3%

16

and a 15% increase in Indian visitors. Russian guest numbers continue to increase and it is now the fourth highest source market in Dubai, with numbers expected to continue rising. Q2 2018 continued to see growth in tourism numbers, with an increase of 1.7% compared to Q1.

Forecast The graph below shows the forecast for hotel room supply.

The total forecast supply includes all projects that have progressed to the planning phase.

This represents an inventory increase of 64.3%, or 69,000 rooms.

However, approximately 58% of the total forecast supply is currently under construction

Dubai hotel room supply increase 100%

14 80%

12

and is expected to be completed

by December 2020. This represents an inventory increase of 41.2%, or 40,000 rooms.

To achieve the 20 million visitor target set for 2020, Dubai needs to increase guest numbers by 7%, 8% and 10% during 2018, 2019 and 2020 respectively.

DTCM data shows the current average length of stay in Dubai is 3.5 days and a double occupancy factor of 1.9. Double occupancy factor refers to the average number of guests per occupied room.

Keeping the above factors constant, assuming Dubai achieves the targeted 20 million visitors and applying the supply forecasts, Dubai can expect to see the average occupancies in the graphs below in 2020.

80%

69,000 rooms (242 projects)

40,000 rooms (140 projects)

60%

8 40%

6

2.9%

Hotel occupancy forecast, 2020

Total forecast supply

Jun 2018 - Dec 2020 10

4.0%

2018 YTD

Department of Tourism and Commerce Marketing (DTCM) reported a total hospitality inventory of 107,431. As of the end of Q2 2018, the total inventory has increased by 4% to 111,743.

Noticeable openings include the QE2 and Holiday Inn Dubai Festival City, both of which opened in April.

Demand in the form of visitors and overnight guests staying in Dubai hotels totalled 15.79 million in 2017.

Dubai continues to diversify and push to increase tourism numbers through a number of government initiatives to promote growth.

Dubai has seen positive results, recording a 41% increase in Chinese tourism

Dubai visitors, millions (2016-2018)

Dubai Luxury

2.0%

4 20%

Dubai hotel room occupancy, 2020

Supply and demand At the end of 2017, the

Dubai Standard

3.9%

2017

relating to property operation, maintenance, system costs, utilities, administration, general, sales and marketing costs.

Luxury properties within the set managed to decrease their undistributed operating expenses per available room (PAR) by 1.4%.

Departmental profits, which include revenue streams linked to rooms, F&B, spas and all other operating departments, fell 3.2% per occupied room (POR).

The result of reduced revenues was partially offset by the reduction in costs, but the average gross operating profit (GOP) of the selected group of hotels was down 5.3% to just under 40%.

YTD ADR changes

60%

40%

20%

2 2016

2017

Q2 2018

Total supply

2018-2020

50%

75%

100%

Forecast supply completed by 2020

August 2018 13

© 2018 LACASA Architects & Engineering Consultants All Rights Reserved

Sr. InterIor DeSIgner I’m Toufic Alayyash and I am a

www.lacasa.ae

Creating a holistic interior experience Telling stories through space is where it all begins.

Interior design is a process involving many stages and only the story being told justifies them all. It is not just about designing interiors, it is about the skill of manipulating architectural volumes and spaces, lights and shadows into creating a holistic interior experience to interpret the story at its best‌ the best stories are the timeless ones.

Toufic Alayyash Sr. Interior Designer

LACASA is committed to providing quality-driven designs within a multidisciplinary environment.

Established in 2006, the firm has grown significantly over the past eleven years. Today, LACASA boasts a diverse portfolio encompassing all types of developments and across the entire MENA region.

While it is said that perfection doesn’t exist, we believe that perfecting design can be achieved by cultivating extraordinary talent.

Analysis

gradual declines Asteco’s Dubai Real Estate Report for Q2 2018 analyses the state of the city’s property market as rental rates and sales prices continue to decline There continues to be a decline in villa and apartment rental rates and sales prices in Dubai, according to a new report released by Asteco, a UAE property services company.

According to its Dubai Real Estate Report Q2 2018, villa and apartment prices fell by 4% over the quarter, with an annual drop of 11%.

The decline in apartment sales was most prominent in Dubai International Financial Centre (DIFC), Discovery Gardens and Dubai Sports City, which registered a 6% fall since Q1 2018. Meanwhile, the highest quarterly drops in villa sales prices were in Jumeirah Park (8%), Arabian Ranches (5%) and The Springs (5%).

However, sales activity remained steady, despite an 16 August 2018

overall bearish outlook from investors and end users. This stability is mainly attributed to further project launches, many of which have increasingly attractive incentives, competitive rates and extended payment terms.

The report also highlights current and anticipated handovers of key projects in Dubai, with Q2 2018 seeing the launch of several new residential projects, including Amaranta 3 and Tilal Al Ghaf Phase 1 in Dubailand, as well as Zawaya – a mixed-use community in Motor City – and Belgravia Heights I & II in Jumeirah Village Circle (JVC).

“Generally, new developments focused on the affordable segment, resulting in a marginally more noticeable quarterly drop in

sales prices at 5%, compared to 3% for mid- and high-end properties,” says John Stevens, managing director at Asteco.

He explains that despite the lower number of anticipated handovers, the volume of new supply remains significant.

This has contributed to an overall quarterly decrease in apartment and villa rental rates of 3% and 2% respectively, while annual declines are more prominent at 12% and 10%.

“Vacancy levels across multiple projects rose due to the supply of additional inventory. Properties with proactive management and maintenance teams succeeded in maintaining steady occupancy rates, while landlords offering

discounts and additional incentives also achieved solid tenant retention. Over the next quarter, we expect further gradual but consistent softening in rental rates for all asset classes,” he adds.

Compared to 2017, the highest apartment rental rate drops were in Jumeirah Village (16%), followed by JBR with 15% and Jumeirah Lakes Towers, Deira and Discovery Gardens with 14% each. Villa rental rates in Jumeirah Park and Jumeirah Village showed the most pronounced annual decrease at 15%, followed

by Arabian Ranches at 11%.

The report adds that approximately 3,400 residential units were handed over in Q2 2018, closely matching the first quarter.

Analysis

APARTMENT STATS:

VILLA STATS:

OFFICE STATS:

3,000

625

55,741

in Q1 2018

in Q1 2018

Q1 2018

2,400

1,000

70,606

in Q2 2018

in Q2 2018

Q2 2018

Units completed

Units completed

The majority of new supply is along the new growth corridors of Sheikh Mohammed Bin Zayed Road (E311) and Emirates Road (E611).

Furthermore, an estimated total of 25,000 units are slated for delivery by the end of the year.

As such, Asteco has revised its 2018 supply projections for both residential units and office space downwards by 17% and 20% respectively, based on a combination of factors, including lower handover volumes in the first half of the year and anticipated project delays.

Units completed

Units completed

sqm completed in

sqm completed in

15,000 3,000 Units expected

Units expected

83,612

in H2 2018

in H2 2018

H2 2018

“Accurate projections for the remaining half of 2018 are problematic and may well be subject to further revisions,” Stevens says.

“In addition to the delay factors mentioned, further variations may result from developers extending project phasing timeframes.”

Meanwhile, completed office inventory rose significantly compared to Q1 2018, with the addition of more than 70,606sqm across two new developments – the 29,728sqm HSBC headquarters in Downtown Dubai and the 40,877sqm third

building of the One Central project in the Trade Centre area.

Stevens says office headline rental rates fell 3% quarterly, having remained more or less steady over the previous 12 months. As such, he explains that the annual decrease has generally been marginal, though he concedes that the underlying picture has been distorted, with net effective rental rates being eroded by incentives such as longer rent-free or fit-out periods.

“Proactive government initiatives and ongoing infrastructure development

sqm expected in

are expected to boost market sentiment and drive investment.

The latest positive announcements include the freezing of school fees for the academic year 20182019, as well as the introduction of a 10-year residency visa for investors and specialists, and 100% foreign ownership of companies outside free zones.

“The UAE has always been a real estate investment haven, and the new laws will attract an untapped pool of international investors seeking a tolerant country with deeprooted values to call home.”

“Properties with proactive management and maintenance teams succeeded in maintaining steady occupancy rates, while landlords offering discounts and additional incentives also achieved solid tenant retention” August 2018 17

In Profile

18 August 2018

In Profile

“I don’t thInk there’s any other company In the world that’s offerIng what we are. the combIned strength that we have wIll be a huge game changer for the entIre constructIon world” Big Project ME speaks to Faizal Kottikollon and Ash Bhardwaj of KEF-Katerra, the entity formed by the merger of KEF Infra with US-based Katerra, to understand how the new company will use technology to disrupt the construction industry August 2018 19

In Profile

t

echnology and construction have always had a symbiotic relationship, with research and development in construction technology leading to increased productivity and performance on the work-site. From the invention of the crane in the sixth century BC to the use of computers to create BIM models many thousands of years later, it’s hard to argue against the fact that technology has been essential to the way that we build things.

However, over the last few years the global construction industry has become strangely resistant to adopting new ideas and concepts. It has been said that construction companies traditionally invest less than 1% of their revenue into new technologies – far lower than any other major industry.

As a result, productivity has seen a steady decline, while costs continue to rise.

As a result of this moribundity in the industry, enterprising companies have been looking to take the next step in the technological revolution – moving construction off the site and onto the production line. These disrupters to the established order have created a groundswell of support for the use of automation and technology in the manufacturing, design and engineering processes.

Two such companies are Katerra, a US technology company focused on the design and construction industries, and KEF Infra, an off-site and manufacturing 20 August 2018

breaking new ground Faizal Kottikollon says the merger will allow both companies to take advantage of investment opportunities in the region, making it a potential growth market.

“One of the things we’re excited about is having access to the Indian market and being able to have the ability to expand into the Middle East”

technology specialist based in Krishnagiri, Tamil Nadu, India.

Having established themselves as successful construction entities on opposite sides of the globe, developing and delivering several projects in their local markets, the companies announced a merger on June 21. This new entity, known as KEF-Katerra, has a significantly expanded geographic reach, manufacturing capacity and market expertise, with more than $3.7bn in bookings across North America and India alone.

As it now looks to expand into the Middle East market, Faizal Kottikollon, founder and chairman of KEF Infra,

and Ash Bhardwaj, Sales, Program Management and Software Development leader at Katerra, sat down with Big Project ME for a chat about the impact of the merger and how the new entity will operate.

“I am very excited by the prospects of this strategic alliance,” says Kottikollon. “We look forward to breaking new ground with a like-minded team, particularly in the Middle East because government support has led to burgeoning investment opportunities, making this region a potential growth market for KEF-Katerra. We will also expand our footprint

In Profile

to other geographies in India, beyond our current markets.”

With both companies employing a vertically integrated model, offering end-to-end services enhanced by design, technology and off-site manufacturing, the duo insist there are tremendous synergies between the two firms that will allow them to offer every possible option to their customers.

“The combined company has got 85 or 86 projects on the ground right now. We’re designing, as we speak, 200 projects and we’re breaking ground on – on average – two projects a week, and one of the things that is happening is that both companies are hitting a growth curve,” says Bhardwaj.

“From Katerra’s perspective, one of the things we’re excited

about is having access to the Indian market and being able to have the ability to expand into the Middle East with the technology that KEF Infra has and what it has developed over there. India is a huge market, it’s a growing market, so we plan to look at India in a holistic way, and I expect to have pan-India coverage to serve clients in different regions.

“At the same time, we’ll be able to take some of KEF’s technology on precast – the facility in India has some of the best in the world – to the US. We’re laying down plans for all this, and it’ll be announced as we move forward.”

Kottikollon adds that the vertical integration of all disciplines, from architectural design, structural design and engineering to MEP and

access to new markets The merger will give both companies access to new markets and customer bases, particularly in India and the US.

vertical integration Both companies offer the potential to vertically integrate a number of construction disciplines through their expertise in technology and automation.

full order book The combined company has 85 or 86 projects underway at the moment, along with 200 projects in the design phase, says Bhardwaj.

August 2018 21

In Profile

finishes, as well as the overall project planning and execution, will allow integrated project delivery, something he feels is lacking in construction today.

In addition to addressing housing needs in its target markets, he says KEF-Katerra will be actively engaged in building critical infrastructure projects, such as hospitals and schools, in areas where they are needed.

“I don’t think there’s any other company in the world that’s offering what we are.

The combined strength that we have will be a huge game changer for the entire construction world,” he asserts.

“Now, we can cover the entire construction sector. We’re already building the biggest shopping mall in India. We can also offer commercial buildings,

residences, hospitals, hotels – our technology is a perfect fit for prefabricated hotels.

There’s nothing stopping us.”

Founded in 2014 by Dubai holding company KEF Holdings, KEF Infra uses robotics and automation in its manufacturing operations to deliver highquality building projects quickly and efficiently. It currently has 1,400 employees and factories

in its facilities in Krishnagiri, Tamil Nadu and Lucknow, Uttar Pradesh, and Kottikollon says the merger will allow KEF-Katerra to bring world-class precast concrete technologies to the US market, greatly expanding the design and materials options available to Katerra’s clientele.

At the same time, the merger between the two firms will strengthen the global supply

covering the entire construction sector The merger will allow KEF-Katerra to build everything from shopping malls through to commercial buildings, residences, hotels, hospitals and schools.

22 August 2018

In Profile

sharing knowledge Ash Bhardwaj says the expanded footprint and operations for KEF-Katerra will allow both companies to share their expertise and knowledge, allowing them to grow together.

“The know-how that KEF can bring to the table, especially in the area of hospitals and malls, will be taken to the US markets”

chain and enhance manufacturing processes in existing KEF markets.

“The demand for what we do is extremely high, both in the North American and Indian markets. Those are the markets we’re focused on at this point in time,” says Ash Bhardwaj. “So far, Katerra has been serving, in the US, the multi-family asset class.

“What we’ve been doing is prioritising the design phases on six or seven other categories as well. The know-how that KEF can bring to the table, especially in the area of hospitals and malls, will be taken to the US markets. That will be a complete market segment that Katerra

will now be able to address.

“From an Indian standpoint, it’s more that we’ll have enough capital to be able to rapidly expand into different areas that have previously not been served. I look upon this as an opportunity to expand the geographical footprint, and to leverage people and technologies.”

Katerra currently employs more than 2,000 people, with operational factories across the US and in Shanghai, China. Once the merger is complete in Q3 2018, the newly formed entity will have more than 3,400 employees, with a global footprint of 20 locations in the US, China, India,

Mexico and the Middle East.

While the duo is reluctant to disclose the financial specifics of the deal, pointing out that both companies are privately owned firms, Bhardwaj says the investment from Katerra has been significant. He adds that Faizal Kottikollon will become a significant shareholder in Katerra and that in addition to the combined bookings being $3.7 billion for the year, the combined pipeline for both companies is close to $8 billion and the expected revenue for this year is in excess of $1 billion and heading towards $3.5-4 billion next year.

However, Bhardwaj is keen to stress that the expanded footprint and operations will allow both companies to share their expertise and knowledge, letting them grow and evolve together.

“The way to look at this is that there are three pieces to the puzzle – one piece is the design part, the design and engineering. Katerra has almost 300 architectural design experts in-house, and similar amounts in engineering. That’s a very strong area that Katerra has got.

“The second piece is the manufacturing – KEF has got a very strong manufacturing facility in Krishnagiri, and Katerra has got plants in the US and China.

Good practice will start within those plants and facilities, so as to put together a common way of operating and coordinating.

“Finally, the third piece is on the field, where the actual construction takes place. We’re very impressed by what KEF brings to the table with that – the disciplined approach that they have. It’s an opportunity for us to learn from that and implement in the US markets as well.

“It’s great that the strengths of each company are going to be used to make each other stronger,” he asserts in conclusion.

August 2018 23

Site Visit

Heart of tHe City

Big Project ME visits One Za’abeel, a new mixed-use development being built by Ithra Dubai, for an exclusive tour of the city’s latest destination project 26 August 2018

Site Visit

August 2018 27

Site Visit

i

n many ways, the Zabeel community, in the eastern part of Dubai, can be considered the heart of the city, as it is adjacent to vital road links that connect it to crucial business, commercial and residential hubs such as DIFC, Dubai World Trade Centre, Dubai Mall and Sheikh Zayed Road.

Divided into two sectors – Zabeel One and Zabeel Two – the community is also home to HH Sheikh Mohammed bin Rashid Al Maktoum’s palace, as well as the famous Zabeel Park, one of

the largest in the city. As such, it’s easy to see why it holds a special place in the hearts and minds of Dubai residents, especially those living in the surrounding area.

Given its central location, it seems obvious that Zabeel should have a destination reflecting its standing within the city, and with the launch of One Za’abeel in September 2017, that is now becoming a reality.

Planned as a mixed-use development consisting of two towers linked by the world’s largest cantilever, the project is set to become an instant icon in Dubai’s skyline, given its location, scale and distinctive design. Once complete, it will feature luxury hospitality and residential elements, along with grade A office space and a high-end retail podium.

StatS: Project Name: One Za’abeel Client: Ithra Dubai Lead Contractor: ALEC Project Manager: Mace Structural engineer: WSP total Built-up area: 480,000sqm when complete tower a Height: 304m tower B Height: 238m the Linx Height above Ground Level: 124m the Linx Length: 200m

Designed by Japanese architects Nikken Sekkei, the project is being developed

by Ithra Dubai, a real estate developer owned by Investment Corporation of Dubai (ICD).

ALEC, a Dubai-based multidisciplinary construction company, has been appointed as the lead contractor on the project, while WSP is operating as the structural and MEP engineer.

Mace is overseeing the entire operation as project manager.

Construction on the project started in late 2017, with work progressing rapidly once ALEC was appointed to the project, starting with a 28-metre excavation completed in September that year. At the time of visiting the site in July 2018, the tower cores were both at Level Two, while basement Starting point Work on the project began in late 2017, with a 28m excavation for the seven basement levels.

“The location of One Za’abeel is at the heart of Dubai.

Everyone who lives in Dubai knows where the World Trade Centre is. One Za’abeel is really close to it, it’s opposite the Trade Centre and as such, the location and connectivity is great” 28 August 2018

Site Visit

Bridging the challenge One of the biggest challenges for the project is the presence of the Al Sa’ada Bridge, which cuts through the centre of the site, between both towers and under the cantilever.

levels B7, B6, B5 and B4 had also been constructed.

The construction of One Za’abeel promises to be extremely complex, with the two towers having 67 and 57 storeys respectively (Tower A will be 304 metres high, while Tower B will be 238 metres high). The massive cantilever – known as The Linx – will be suspended 124 metres above the ground.

The entire structure will rise up from a three-level podium and seven basement levels.

However, as complicated as this already sounds, perhaps the most significant engineering challenge is the enormous Al Sa’ada Bridge bisecting the site, which has been incorporated into the project design. Once construction is complete, the bridge will run between both the towers and under the span of The Linx, creating a distinctive and inspiring structure never before seen in Dubai, says Issam Galadari, director and CEO of Ithra Dubai, who sat down with Big Project ME for an exclusive interview and tour of One Za’abeel.

“The location of One Za’abeel is at the heart of Dubai. Everyone who lives in Dubai knows where the World Trade Centre is. One Za’abeel is really close to it, it’s opposite the Trade Centre and as such, the location and connectivity is great,” he asserts. “It’s like an

island. It has fantastic connectivity in terms of infrastructure, it’s close to Downtown Dubai, to DIFC, it’s very central. The view from the project is great as well. You have Zabeel Park, which is very close, and the view of the city towards the Creek, and also towards the coast, is great. And it’s right on Al Sa’ada Bridge, so the two towers, with the bridge in between, will create a great experience, even for people visiting Dubai for the first time. They’ll be coming in from the airport and they’ll see the two towers and they’ll be driving between

them. It’ll be a great effect, I don’t think they’ll have another experience like this in Dubai.”

Galadari reveals that the design for the tower was influenced by the plot of land. With the bridge cutting through the land area, the design team were forced to get creative to come up with a design that would incorporate it.

“We then had the idea, about what could we really take advantage of with the existing situation? What can we create that would complement the other iconic buildings in Dubai? We’re not competing with them, not

in terms of height, but this is a luxury project and it’s got to be a great project, it’s got to be iconic.

“So we decided to take advantage of the bridge and make a really beautiful, attractive and luxurious development that is at the centre of Dubai. The two towers, The Linx and the bridge in between – this is how we started. Then we engaged a number of international architects, we created a competition and then we reviewed the different ideas they had.

“It’s a beautiful model [design], but it was important to have it very simple and timeless. What we’ve come up with, we feel that we’ve got that – it’s iconic and timeless.”

Work on the project started in 2014, and one of the key elements is the residential aspect, Galadari says. As such, it was decided very early on in the design process to put the residential tower on the far side of the bridge, closer to Zabeel Park. This was a conscious decision, keeping in mind the safety of the younger residents of the tower, he explains, as there will be a pedestrian bridge

taking advantage of the situation Issam Galadari says Ithra Dubai’s project team for One Za’abeel decided to use the presence of the bridge to create a distinctive design that would fit in with the Dubai skyline.

August 2018 29

Site Visit

connecting the residential tower to the park, creating a safe avenue for residents and their children to cross over.

“This is especially for the children, so that they don’t have to cross the roads. We created the bridge that will link from the residential tower area, so that residents can get to the park and enjoy that area. I don’t think a lot of developments have such proximity to a park, in terms of towers.

“In addition, the tower will also have its own amenities and facilities in the building or the podium, such as swimming pools, playgrounds, gyms and so on.

Residents can be assured that if their kids go out of the building to the park, it’ll be safe. They don’t have to worry about them crossing roads or anything like that, as it’s a straight connection.”

This concept of connectivity is also repeated in the commercial tower, which will hold grade A commercial offices, a One and Only Urban Resort Hotel and the new headquarters of the Investment Corporation of Dubai.

The offices will be housed in the section of the tower below The Linx, while the hospitality section will run to the upper floors of the tower, though the highest levels will be reserved for the new headquarters, Galadari says. Like the residences, the office tower will also have a bridge providing easy access to the Dubai World Trade Centre.

Work on One Za’abeel is progressing according to schedule, he adds, with the targeted completion date in the latter half of 2020.

Galadari is quick to point out that while there are always hiccups during the construction process and a lot of challenges – especially around the complexity of the structure – a large part of the credit is due 30 August 2018

to the project’s contractor.

“Having ALEC as the contractor [has been very helpful]. They are one of the best contracting companies in Dubai. You can feel the quality of work even as you drive up to the site offices, with the area being so clean. When you enter the lobby of the site offices, you can feel that it’s different. It may be a simple thing, but it’s about how you handle things. If this is the site office, just imagine what the project is going to be like.

“Actually, a lot of contractors were invited to bid for the project, and eventually we landed on ALEC because they were the most attractive bid, not just in terms of the price, but also because of the quality of delivery and their past experience. I know their work personally, as they’ve done work for me in the past in my other organisations, and they’ve done quality jobs. They’ve done all types of projects – mixeduse, airports and so on. We’ve seen that they are the ones who can deliver a project to a very high standard, and according to what we expect it to be.”

Construction logistics are the main challenge, as can be expected, given that the site is an island plot surrounded by a major road network. However, ALEC tells Big Project ME that its project team worked closely with Mace to plan and operate multiple logistic models. These include just-intime, off-site prefabrication, consolidation centres, staging zones and pre-cut materials, which all helped to reduce the known hoist cycle time.

Given the scale of the project, coordinating operations onsite was also a challenge, with ALEC having to coordinate each trade, starting with a Logistic Welcome Pack issued at the kick-off meeting. With this pack

Site Visit

Using the space available ALEC and Mace worked together to create a plan to use the space available on the site itself to hold building materials until they were needed on the project.

August 2018 31

Site Visit

Working together Ithra works closely with all the stakeholders on the project, so as to ensure that there is constant collaboration and cooperation, says Galadari.

setting out the site protocols, the contractor was able to embed processes early, allowing its project team to carry out daily coordination programmes with each trade contractor.

Designer coordination on the project is carried out by Mace, which then issues the Information For Construction (IFC) to ALEC. While ALEC is certainly in charge of the construction process, Galadari does add that Ithra Dubai plays an active role in overseeing progress on-site, with the developer’s CEO keen to establish and build strong partnerships between all parties.

“We have a strategy of developing projects together.

We don’t work with contractors and consultants as just contractors or consultant firms, we work with them as partners. We believe strongly in partnership, and that any project you start is an adventure, and that a strong partnership between all parties is crucial.

“From my chairman through to me and through to my other colleagues, we are all involved.

We don’t leave the project alone, even down to the handles on a door. We are all partners on the project, and if there are issues, or if any challenges arise, it’s discussed among us. I’m personally involved.

If the contractor has any issues, he brings it to us and we discuss 32 August 2018

it with the project managers and the architects and designers, including our own ones.

“We also have weekly meetings and executive meetings as well, where all the executives of the companies are involved. We are very happy with how things are going so far, we’re working well together, and I believe that we’re all very strong as a team.”

This high level of coordination is best exemplified by the way the two towers are being built in conjunction, with ALEC explaining that the project teams are split in the same way, one for

Tower A and one for Tower B, with weekly logistics planning carried out as one project site.

This is because there is only one site perimeter road.

Furthermore, the bridge is monitored 24/7 for movement, while the project team coordinates closely with both Dubai Municipality and the RTA, meeting every week to ensure that the required NOCs are in place in a timely manner.

“As I’ve mentioned, we are partners with the consultants and the contractors. We are in the trenches with them and we

Strong relationships Galadari praises the project stakeholders for the strong relationships and partnerships they have, stating that these will help to successfully deliver the project.

work with them. We attend a lot of those meetings with the RTA and the municipality to understand [what the issues are]. It is a very challenging development, and nobody has done an excavation like this – seven levels below and adjacent to a live bridge.

“You can see how close it is and how deep we’ve gone.

We’ve managed to work with the authorities to make sure that everything is proper and that the safety standards are in place.

We have to make sure that the bridge doesn’t even move – it can’t bend or tilt,” he stresses.

“We are heavily involved with [the discussions] and we will continue to be heavily involved with them. We are partners and we want to make sure that we achieve what we’ve started, to the highest standard in the world.”

Given the location of the project, one major challenge is the movement and management of the workforce. At present, the current workforce is 3,000, but at peak that number will grow to 10,000.

Managing these numbers will be quite the task for the contractor, but it says there are plans in place

Site Visit

Monitoring the bridge The project team will be keeping a close eye on the bridge during construction, using sensors and tracking systems to ensure there is no disturbance or movement caused by the work on-site.

“Having ALEC as the contractor [has been very helpful]. They are one of the best contracting companies in Dubai. You can feel the quality of work even as you drive up to the site offices, with the area being so clean” to ensure the smooth flow of personnel on and off the project.

The movement of men will be carried out by 10 construction hoists and three jump lifts capable of moving 5,000 men in two hours, the contractor explains to Big Project ME. When it comes to the logistics around the movement of materials and construction, floors will be pre-loaded with cut/prefabricated materials during the night shift, so that the day shift can install them.

The façade will be unitised on both towers, loaded onto cassette units and lifted onto loading platforms, to be installed by monorail cranes during the day. This streamlined approach will help speed up operations on-site, it says.

One of Galadari’s biggest concerns is the welfare of the workers on-site. He asserts that it is part of Ithra Dubai’s mandate to have health and safety as the first item on its agenda, no matter the scale or prestige of the project.

“This is emphasised from the kick-off meeting we have when we engage our consultant, and when the contractor comes on board with us. We make sure that the safety of people on-site is the number one focus for us – they are the ones that should be at the top of the agenda for any company.

“It doesn’t matter what position they hold. We are all human beings and we have to make sure that we look after each other, one way or another. I’m very strong about that, looking

after the labour forces. They deserve the respect of everybody as they are the people building the country, they are the people who built Dubai and I value what they do,” he states strongly.

“If there’s anything that we don’t feel is proper, then we’re ready to stop the work, no matter the number of days it takes, so as to make sure that safety is number one.”

With regard to construction technology, ALEC says single-deck jump-form rigs have been used to construct the cores, while a sliding screen system protects the outer perimeter of each tower over three floors. This aids production by removing the risk of falls and falling materials. Furthermore, jump lifts will be used to remove

the construction hoists early on, to allow the façade to be completed.

In addition, 10 tower cranes are being used currently on the project, including a Favco M2480D with an operational capacity of 110t, four 100t mobile cranes and one 50t mobile crane.

Additionally, eight concrete pumps were used to cast the 16,100m3 of concrete for the foundation of Tower A, which was completed in 72 hours, the contractor says.

“We are using the latest technology that is available to us in construction. ALEC is one of the best contracting companies, and we have discussed this with them.

We are using BIM in our project, it’s being used very efficiently,” Galadari adds. He also reveals that One Za’abeel will be targeting August 2018 33

Site Visit

LEED Gold certification, going well beyond the green building standards and sustainability regulations set by Dubai Municipality.

“From that aspect, we’re going beyond what the requirement is. I’m very happy that we’ve pushed for it and hopefully we’ll get LEED certification at the end of the project, as that’s our target. We have a LEED consultant working with us, looking at all the small items in development, helping us make sure we achieve that certification.”

Finally, he points out that although construction on The Linx is still some time away, the project team has already begun mapping out the engineering and construction that will go into putting it

Safet y is priority safety of Issam Galadari says the health and el is of the labour force working on One Za’abe Dubai. the highest priorit y to him and to Ithra

“It doesn’t matter what position they hold. We are all human beings and we have to make sure that we look after each other, one way or another. I’m very strong about that, looking after the labour forces”

into place. Once complete, the viewing platform will float 124 metres above the ground and run for 200 metres, offering several hospitality options to visitors, guests and residents, while the cantilever itself will be the longest in the world.

“A lot of people ask about The Linx. They wonder what it is, some of them even ask if it’s just a bridge between the two towers. It’s not – in fact, it’s going to be a surprise for everybody.

It is part of the hospitality offering, and special venues and restaurants will be part of it.

“The location is great, it’ll be over Al Sa’ada Bridge and will have a great view. It’s a location that I think is stunning and unique. We have created something with all the comforts for people to come and live in this unique development.”

Planning ahead Although construction and installation of The Linx is still some way ahead, the project team has already begun mapping out and planning the engineering and construction of what is to be the world’s largest cantilever.

34 August 2018

26 November 2018 Double Tree Hilton JBR

Dubai, United Arab Emirates

The Big Project ME awards has proved itself to be among the most distinguished in the industry with leading players in construction from the region participating. Al Naboodah Construction Group are delighted to be a part of this gathering of eminent industry professionals.

SeNaN aBDullaH al NaBooDaH

Managing Director of Al Naboodah Construction Group

BigProjectmeawards.com

Robotics

Suhail Arfath

Robots aRe heRe to stay Suhail Arfath, industry manager at Autodesk, says the use of robots on construction sites will only continue to grow as technology improves and becomes more responsive to the needs of builders “Are robots going to take our jobs – really?” is one of the most frequent questions I get asked by friends and colleagues in the construction industry. Let’s look at the opportunity and challenge driving this need or threat. The world’s population is estimated to reach nine billion by 2050, with approximately 70% living in cities.

To keep pace with this growth, the world needs to invest $3.3 trillion in roads, energy, water, telecoms, transport and other infrastructure annually through 2030, and add a thousand buildings a day for the next 30 years.

The great challenge is that the construction industry is not set up for success; when you look at a construction site, it can look like chaos. Projects 36 August 2018

are complex and in congested areas, and close coordination is required in real time.

The Boston Consulting Group recently estimated that within ten years, the full-scale implementation of digital processes could lead to annual global cost savings of $0.7-1.2tn in non-residential construction.

One of the very exciting things about this is that we’re entering a really new, interesting era where manufacturing and construction processes are merging. We see an increase in the use of prefabrication and robotics.

For instance, Dutch company MX3D plans on 3D printing a steel pedestrian bridge over a canal in Amsterdam. MX3D is an R&D company working to develop

Using technology Robots can do the heavy labour on-site, while artificial intelligence can follow up with the smart work of identifying and reporting the errors in the work executed, thus helping to improve productivity, eliminate rework and deliver projects on time and within budget.

cost-effective robotic 3D printing technology and has invented a 3D printing tool in the form of a six-axis industrial robot that can 3D print metals and resin in mid-air, without the need for support structures. The tool adds small amounts of molten metal at a time, enabling it to print extremely intricate metal shapes.

The first production test is the bridge, with the structure to be printed in the span of two months using multiple robots on location – not in a factory setting. The tools will print their own supportive railing, as well as the steel for the bridge.

In the era of connection, the construction industry has the largest opportunity for gain in the global marketplace. Another

recent study by the Midwest Economic Policy Institute (MEPI) estimates that approximately 49% of all construction tasks can be automated. That’s huge! Now look at another example from Doxel. As you know, site inspection, reporting errors and questioning the source responsible for the error are the most critical and cumbersome tasks at the construction site. In this case, Doxel AI is using robots and AI to monitor job-site progress in real time with actionable data.

Autonomous drones capture construction site progress each day and AI uses the scans to compare against the project’s BIM (Building Information Model), schedule and estimates to inspect the quality and progress on daily bases.

The robots do the labour and

Robotics

“In the era of connection, the construction industry has the largest opportunity for gain in the marketplace.

A recent study by the Midwest Economic Policy Institute estimates that approximately 49% of all construction tasks can be automated”

AI follows with the smart work of identifying and reporting the errors in the work executed, thus helping to improve productivity, eliminate rework and help deliver projects on time and within budget.

Robots are nothing new – they have revolutionised manufacturing.

Because of robots, production lines now can be fully automated.

Robots can also be very unsafe, and thus we usually confine them in a strictly controlled environment, which is an incredibly costly and time-consuming process.

Basically, the location of everything a robot interacts with is hardcoded up front. This is because robots are unaware of their surroundings, so have no way of knowing, let alone reacting, if something unexpected happens.

This has always been one of the key reasons to keep robots at bay in the ever changing construction site. So the questions which the industry has been trying to solve over the last few years are: Can we give these machines freedom and augmentation and power, the way we eliminated bias and liberated the human? Can we change the way we communicate with them?

Can we have them learn what we aim to do, rather than how to do it?

For robots to be ubiquitous and helpful, they will need to be easier to use. Robots, in combination with technologies like 3D printing, AI, VR and machine learning, are not just coming to the construction site but are necessary for the construction industry and world economy.

For instance, let me introduce you to Ash, one of Autodesk’s research robots.

Ash looks like other robots, but we do not lock her up.

We’ve given Ash a clear vision and the ability to 3D print in metal. We do not tell Ash the tasks required to 3D print something; we just tell her what we want to 3D print.

She works in a closed loop system to see what she’s doing, and self-corrects as she prints.

As Ash gains experience and gets better at what she does, she can then use that experience on something else.

So Ash operates by herself.

We wanted to build even more flexibility into Ash by finding a way to work collaboratively with

her, so we brought her into a fullscale, real-time VR environment that we can step into. We can then work using intuitive controls that we and Ash can understand.

Soon, cities will be alive. Our assets will talk to each other, generate even more data and put it in use to do more for us.

Even the building industry is seeing its share of digitisation. Due to better sensors and controllers, robots are now able to pick up a brick, apply mortar and lay brick following a floor plan. In some instances, this is becoming commercially feasible as well.

With this amount of data, insight and intelligence, robots are not rigid anymore – we’re building machines with curiosity and intelligence that can evolve.

August 2018 37

Building Envelopes

Belarmino Cordero

Enhancing thE Existing Belarmino Cordero, division manager, Facades at AESG, on optimising energy efficiency with building retrofits A lot of attention is beginning to be focused on zero-energy buildings in the Middle East, and the Emirates Green Building Council has even defined the concept as a “building with a site energy use intensity (EUI) [of] less than 90kWh per square metre per year, and covers a significant portion of its annual energy use by renewable sources produced on-site or off-site”.

Whilst it is vital that we transition design and construction practices towards the adoption of zero energy concepts, it is also critical to focus on the application of energy efficiency to the existing building stock. This is because the majority of the existing buildings are far away from the end of their design life. They will still be around in years to come representing a 38 August 2018

large share of the future building stock. Acknowledgement of this is reflected in the drive by the Dubai Supreme Council of Energy to retrofit buildings to increase their efficiency. And the UAE isn’t alone in this quest. AESG recently created a report commissioned under the chairmanship of HH Sheikh Khalid Bin Abdullah Al Khalifa, Deputy Prime Minister of Bahrain, in line with the Kingdom’s national plan for energy efficiency and renewable energy.

For this, our team researched and designed solutions specifically applicable to the country to develop a set of Thermal Insulation Guidelines for Residential Buildings that can be used to assist designers and engineers in the decision-making process and

selection of appropriate facade systems for both new buildings and retrofits. These guidelines present more than 21 different systems as options to guide project teams during design and construction, but also identify cost effective solutions for retrofitting building envelopes.

The reduction of peak power demand is of notable importance as it can help downscale the country’s infrastructure for generation and transport of energy.

From the consumer’s end, the results can also help improve tenant satisfaction

The Role of Facades and Bioclimatic Architecture Environmentally conscious architectural design can reduce energy consumption of a building by 10-30% through simple passive measures such as orientation, ratio and location of glazing, shading and through the utilisation of highperforming facades. Over a country scale, this can have a substantial impact on domestic carbon emissions and energy demand.

Design Considerations Design of the building envelope elements should consider building performance and take into account all measures that contribute to optimising energy efficiency.

This starts with studying and implementing passive techniques such as adjusting the building orientation, window to wall ratio, shading exposed facades and detailing of the envelope systems to reduce thermal bridges.

Building Envelopes

impacting design considerations The uptake of voluntary certifications such as LEED and BREEAM, as well as mandatory requirements by Estidama and Al Sa’fat in the UAE, has greatly impacted design considerations by raising minimum standards and requirements.

The application of these measures in buildings is now considered in more projects in the Middle East as project stakeholders become aware of the benefits of optimising building performance.

Moreover, the uptake of voluntary certifications such as LEED and BREEAM, as well as mandatory requirements by Estidama and Al Sa’fat in the UAE, have impacted design considerations by raising minimum standards.

Enhancing Existing Projects Most experienced architects agree that a retrofit is more challenging than a new project. This is because retrofits have more constraints and unforeseeable issues. One of the typical challenges is access to limited amounts of information

on existing buildings. The as-built drawings are often not reliable, which necessitates the need for detailed surveys prior to retrofit. It is therefore advisable to be cautious and take a conservative approach to structural loading in the proposals.

If parts of the facades are being retained, it is important to assess rigorously the relative location of the air, thermal and vapour barriers in the final retrofit build-up, as getting these wrong could provoke interstitial condensation. It is also important to ensure that the interfaces are properly designed and inspected.

Building in Best Practices Whether for new projects or existing developments, obtaining a building with good envelope

performance should be the final objective of a design, construction and retrofitting process. This process should consist of: 1 defining the weather tightness envelope of the building; 2 setting ambitious but attainable performance targets for each façade type; 3 - specifying appropriate control methods such as schedule of testing and inspections; 4 - reviewing the contractor’s documentation, including drawings, calculations and material submittals; 5 - monitoring fabrication and installation through testing and inspections.

The final outcome could be jeopardised if any of these steps are neglected. The best way to ensure quality and

performance is maintained throughout the building process is through building envelope commissioning with thirdparty specific supervision of the elements and processes that affect the final performance of the envelope. LEED Version 4 recognises the importance of this and has allocated credits for the implementation of a robust envelope commissioning regime The enhancement of existing projects should be a continuous endeavour as new methodologies and technologies emerge.

Retrofitting has its challenges, but with significant long-term operational cost benefits − not to forget the reduced impact on the environment − efforts to this end can be completely justified.

August 2018 39

Sustainability

Abdulla Al Nuaimi

AdvAncing Low-cArbon UrbAn deveLopment in the UAe

Abdulla Al Nuaimi of Emirates Wildlife Society – WWF explains why it’s crucial to support the research and study of low-carbon living and development in the UAE Climate change has the potential to alter the UAE and the wider region forever. It is for this reason that Emirates Wildlife Society, in association with WWF (EWSWWF), continues to support the significant steps required towards low-carbon living and development in the UAE. As you already know, global temperatures have been rising for over a century – speeding up in recent times to the highest on record.

In the last 100 years, human activity has increased the Earth’s temperature by 1°C. By the end of this century, it could be anywhere 40 August 2018

between 1.4°C and 5°C higher.

Most of our cities and industries are located in flat coastal areas, so these developments and people’s livelihoods are going to be affected by more extreme weather events and rising seas.

Fortunately, there are positive actions available to individuals and industry, but the need to act cannot be stressed enough.

Sustainability through partnership To encourage and facilitate lasting change, EWS-WWF develops lasting partnerships with industry in the UAE. Advancing

transforming real estate development in the UAe The Sustainable City demonstrates how a lowcarbon business model can be transformational for real estate development in the UAE, while positively contributing to economic growth.

low-carbon urban developments in the UAE forms part of these partnerships. One such example is The Sustainable City (TSC) by Diamond Developers, a residential and mixed-use development covering 46 hectares in Dubai.

EWS-WWF and TSC entered into a strategic partnership to address climate change, promote renewable energy and reduce greenhouse gas (GHG) emissions.

TSC demonstrates how a low-carbon business model can be transformational for real estate development in the UAE, while positively contributing to

economic growth. Completed in 2016, phase one of the development has become an international case study for sustainable living, work and wellness, and aims to become the first operational net zero energy development in the region.

Phase two, slated for completion in 2019, will comprise three facilities: Hotel Indigo, Fairgreen International School and an Innovation Centre to advance and share knowledge on urban sustainability. Total emissions in 2017 were 8,761 tonnes of carbon dioxide equivalent (tCO2e).

GHG EmISSIonS REdUCtIon At tHE SUStAInAblE CIty TSC villas are built with sustainable design principles and fitted with energy-efficient air conditioning and appliances. This has resulted in an Energy Use Intensity (EUI) value of 97kWh/m2, about 39% lower than the minimum EUI of conventional villas built according to local new building construction regulations and specifications (160kWh/m2).

Additionally, TSC has installed 6.4MWp of rooftop photovoltaic panels. These installations provide clean energy and will further reduce total emissions in 2018 as the remaining modules come online. Aggressive demand side management and renewable energy uptake have effectively lowered the GHG emission intensity of TSC villas by more than 50% compared to conventional villas in Dubai.

“We believe that the UAE is well positioned to accomplish renewable energy targets and reductions in our carbon footprint”

The top three emission sources were electricity (51%), waste (24%) and water consumption (11%). By working together from the planning stages to effectively monitor and record such data, it becomes possible to achieve ambitious targets and make significant steps towards low-carbon urban development in the UAE. Why partnerships matter At EWS-WWF, we believe that the UAE is well positioned to accomplish renewable energy targets and reductions in our

carbon footprint. Record prices for both solar photovoltaics and concentrated solar power electricity generation are allowing the use of renewable energy technologies to become a commercially viable option throughout the nation.

As our work with TSC demonstrates, transitioning to renewable energy provides great economic opportunities for those committed to reducing their emissions. Through our Sustainability Partnerships Programme, the private sector can join hands with EWS-

WWF to play a larger role in the development of renewable energy solutions in the UAE. As a federal NGO, in association with WWF, we are committed to helping our society to redefine its relationship with our planet so that people can live in harmony with nature, and it is through mutually beneficial partnerships that tackling climate change becomes a reality.

Climate change is one of the biggest threats currently facing the planet and humanity – but we have a wealth of solutions at the ready.

All that’s required is action.

August 2018 41

Show Preview

THE BIG 5 CONSTRUCTION EVENT LAUNCHES IN EGYPT

Doors will officially open in Cairo on September 18, 2018, organisers say

Connecting the world with Egypt The exhibition will connect thousands of industry experts, decision-makers, buyers and manufacturers of construction products from all over the world.

The doors of the first Big 5 Construct Egypt show will officially open in Cairo on 18 September at the Egypt International Exhibition Centre. The largest portfolio of construction events in the Middle East, The Big 5 launches its first exhibition in Egypt at a time when the country is witnessing a construction boom, with more than $335 billion in active projects. With mega developments in the pipeline, Egypt is fast becoming a lucrative construction and real estate destination.

The exhibition will connect thousands of industry experts, 42 August 2018

decision-makers, buyers and manufacturers of construction products from all over the world. 15 international country pavilions, including Germany, Italy, the UK, Spain, China, Turkey and France, have confirmed their participation.

Greece has also secured a prominent space, becoming the official country partner for the launch edition of the event.

The Big 5 Construct Egypt will showcase 360-degree building solutions across six product sectors: MEP Services, Building Interiors and Finishes, Building Envelope and Special Construction, Construction

Tools and Building Materials, Construction Technology and Innovation, and Plant Machinery and Vehicles.

Like other events in The Big 5 portfolio, The Big 5 Construct Egypt will place significant focus on the quality of content. Free educational events, including 40 Continuing Professional Development (CPD) certified workshops, will run parallel to the exhibition.

Presented by both Egyptian and international experts, these will address key industry issues, exploring hot topics within the Egyptian construction sector during the show’s four days.

The Big 5 Construct Egypt is supported by the Egyptian Federation for Construction and Building Contractors (EFCBC) and the African Federation for Construction Contractors Associations (AFCCA). Some of the largest industry players have partnered up with the event, including the international Underwriters Laboratories (UL), the Saudi Al Bawani Company, Sphinx Glass, Ezzsteel, Kandil Steel and Al Sherif Group.

To find out more about The Big 5 Construct Egypt (18-21 September 2018, Egypt International Exhibition Centre), visit www. thebig5constructegypt.com.

Big Project Middle East is hosting a one-day summit that will address the key issues and topics around the topic of Value Engineering. Through a series of dialogues, the Summit will offer construction profe sionals an opportunity to define and understand what Value Engineering can bring to the table.

The VE Summit makes networking opportunities possible for stakeholders from across the construction industry, allowing them to focus on the challenges and topics that surround the sector.

KEy THEMES  The Good and Bad of Value Engineering  Implementing Value Engineering  Why Value Engineering matters  How Value Engineering impacts the Bottom Line  Design and Construction Applications for Value Engineering  Defining roles during the Value Engineering process  Technology in the Value Engineering Process  Developing Research and Development for the GCC To register go to website link: www.valueengineeringsummit.com GET IN TOUCH CONTACT US CONTENT Gavin Davids +971 4 375 5480 gavin.davids@cpitrademedia.com

SPONSORSHIP Jude Slann +971 4 375 5714 jude.slann@cpitrademedia.com

Gold Sponsors

MARKETING Sheena Sapsford +971 4 375 5498 sheena.sapsford@cpitrademedia.com

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Tenders

Top tenders Jumeirah al Sahel reSort & Spa proJect – manama

movenpick hotelS & apartmentS proJect – BauSher

Budget $100,000,000 project number WPR3447-B territory Bahrain client Bahrain Mumtalakat Holding Company Description Construction of a five-star resort across a land area of 700,000sqm, with complementary leisure, entertainment and tourist attractions period 2019 Status Current Project main consultant Mohammed Salahuddin Consulting Engineering Bureau – MSCEB (Bahrain) tender categories Construction & Contracting, Hotels tender products Hotel Construction

Budget $80,000,000 project number WPR3507-O territory Oman client Civil Service Employment Pension Fund (Oman) city Ghala phone (+968-800) 70006 Fax (+968) 2411 6050 email cs@civilpension.gov.om Website www.civilpension.gov.om Description Construction of a hotel apartment tower period 2020 Status New Tender tender categories Construction & Contracting, Hotels tender products Hotel Construction

marriott executive apartmentS proJect – al Salam Budget $50,000,000 project number WPR3508-SA territory Saudi Arabia client Al Murjan Investment (Saudi Arabia) city Jeddah 21543 postal/Zip code 51238 phone (+966-12) 699 5555 Fax (+966-12) 699 2222 email info.investment@almurjan.com Website www.almurjan.com Description Construction of hotel apartments comprising 100 stylish units, along with a dining outlet, a fitness centre and swimming pool period 2023 Status New Tender tender categories Construction & Contracting, Hotels, Leisure & Entertainment tender products Hotel Construction, Retail Developments

SoBha creek viStaS proJect – SoBha hartlanD Budget $50,000,000 project number WPR3534-U territory United Arab Emirates client name Sobha Real Estate LLC (Dubai) city: Dubai postal/Zip code 52687 phone (+971-4) 423 8064 email info@sobha-me.com Website www.sobha-me.com Description Construction of 2 towers comprising ground and 28-storey luxury 1- and 2-bedroom apartments period 2021 Status Current Project main consultant PNC Architects LLC (Dubai) tender categories Construction & Contracting, Prestige Buildings tender products High-rise Towers

viDa hotel & reSiDenceS proJect – alJaDa Budget $50,000,000 project number WPR3518-U territory United Arab Emirates client Arada (Sharjah) city Sharjah phone (+971-800) 27232 / (+971-6) 562 3865 email info@arada.com Website www.arada.com Description Construction of a hotel comprising 175 guestrooms as well as residences consisting of 120 units period 2020 Status New Tender tender categories Construction & Contracting, Hotels tender products Hotel Construction, Residential Buildings

44 August 2018

PROJECT INTELLIGENCE, TENDERS & SUPPLY CONTRaCTS IN ThE MIDDLE EaST

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Contractors & Sub-Contractors Consultants, Design, FEED & EPC Companies Manufacturers, Suppliers & Traders Service Providers, Insurance & Banking Sectors Recruitment, Logistics & Facilities Management and many more...

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Easy Search for new & ongoing projects by country, location, client and category.

Get the initial information as and when the projects announced.

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Tel: +971 2634 8495 Fax: +971 2 631 6465 Email: sales@middleeasttenders.com www.MiddleEastTenders.com

Tenders

Middle East tenders UAE meDical hoSpital conStruction proJect – khaliFa city Budget $25,000,000 project number WPR3525-U territory Abu Dhabi client Private investor (Abu Dhabi) Description Construction of a medical hospital period 2019 Status Current Project main consultant Sora Consulting Engineering (Abu Dhabi) main architect Sora Consulting Engineering (Abu Dhabi) mep consultant Sora Consulting Engineering (Abu Dhabi) Structural consultant Sora Consulting Engineering (Abu Dhabi) main contractor Al Qodorat Engineering & General Contracting (Abu Dhabi) tender categories Construction & Contracting, Medical & Healthcare tender products Hospital Construction

reSiDential BuilDing proJect – al khan Budget $35,000,000 project number: WPR3516-U territory Sharjah client American University of Sharjah (Sharjah) address University City postal/Zip code 26666 phone (+971-6) 515 5555

46 August 2018

Fax (+971-6) 515 2200 Website www.aus.edu Description Construction of a residential building comprising a ground floor, 6 parking levels, 3 mezzanine floors and 33 floors period 2019 Status New Tender main consultant QHC – Architects & Engineers LLC (Sharjah) mep consultant QHC – Architects & Engineers LLC (Sharjah) tender categories Prestige Buildings tender products High-rise Towers, Residential Buildings

Saudi Arabia inDuStrial WaSte Water treatment plant (iWtp-8) upgraDe proJect – JuBail Budget $3,000,000 project number WPR3517-SA territory Saudi Arabia client Power & Water Utilities Company for Jubail & Yanbu – MARAFIQ (Saudi Arabia) address Jubail Industrial City city Jubail 31961 postal/Zip code 11133 phone (+966-13) 340 1111

Fax (+966-13) 340 1168 email butiza@marafiq.com.sa Website www.marafiq.com.sa Description Carrying out upgrading of an Industrial waste water treatment plant Status Current Project main contractor Engineering Procurement & Project Management – EPPM (Saudi Arabia) Waste Water treatment System Supplier Bluewater Bio (UK) tender categories Industrial & Special Projects tender products Waste Water Network & Treatment Plants

Tenders

neW cruDe tranSmiSSion line proJect – al khaFJi Budget $50,000,000 project number WPR3291-SA territory Saudi Arabia client Al Khafji Joint Operations – KJO (Saudi Arabia) address Al Khafji Joint Operations Company Bldg, Al Khafji Port Area city Al Khafji 31971 postal/Zip code 256 phone (+966-13) 765 2000 Fax (+966-13) 765 5148 / 766 2934 email info@kjo.com.sa Website www.kjo.com.sa Description Engineering, construction, offshore installation and commissioning of a new crude transmission line Status Current Project main contractor Saudi Arabian Saipem Ltd (Saudi Arabia) tender categories Gas Processing & Distribution, Oilfields & Refineries tender products Crude Transportation/Storage & Distribution

a banquet hall and retail outlets, along with a 4-star hotel period 2019 Status Current Project main contractor Unique Contracting Company (Oman) tender categories Hotels, Leisure & Entertainment tender products: Hotel Construction, Residential Buildings, Retail Developments

Bahrain acaDemic meDical centre proJect – king aBDullah meDical city Budget $15,000,000 project number WPR3499-B territory Bahrain

client Ministry of Health (Bahrain) city Manama postal/Zip code 12 phone (+973) 1728 5572 Fax (+973) 1727 0979 Website www.moh.gov.bh Description Construction of a medical college in an 800,000sqm medical city period 2020 Status New Tender main consultant Saudi Consulting Services (SaudConsult) – Saudi Arabia mep consultant Saudi Consulting Services (SaudConsult) – Saudi Arabia tender categories Construction & Contracting, Education & Training, Medical & Healthcare tender products Educational Developments

Egypt Solar park control centre proJect – BenBan Budget $25,000,000 project number WPR3505-E territory Egypt client Egyptian Electricity Transmission Company (EETC) address Abassia, Nasr City 11517 city Cairo postal/Zip code 12612 phone (+20-2) 2261 8579 Website www.eetc.net.eg Description Establishment of solar park control centre Status New Tender tender categories Power & Alternative Energy tender products Solar Energy

Oman WarDat riyam proJect – riyam park Budget $25,000,000 project number WPR3331-O territory Oman client Al Yousef Group (Oman) city Muscat PC 100 postal/Zip code 200 phone (+968) 2461 4499 Fax (+968) 2461 4144 email coo@alyousefgroup.com Website www.alyousefgroup.com Description Construction of a residential scheme comprising two buildings offering 36 premium apartments, including

August 2018 47

Last Word

How to manage variations and maintain profit Graeme Braybrooke, CCS business and systems analyst, examines how variations play a major role in the success or failure of a project Variations play a major role in the construction industry, and in many instances not having proper control of these variations leads to cost and budget over-runs. Variations not correctly managed and captured could spell certain gloom for any contractor, large or small, inevitably affect the contract, and could possibly have dire consequences on relations between contractor and consultant. Which in turn could lead to disputes, and in an industry that is already adversarial in nature, it’s a scenario we’re unfortunately accustomed to.

So how do leading global contractors deal with scope changes and variations?

How do we keep the client and consultant updated with changes, and how do contractors prove the cost that has been incurred by completing these variations?

What about extensions of time claims and proving indirect costs?

Many questions and

48 August 2018

scenarios can be disputed, and invariably are.

Being aware of any variations in real time allows the project team to take immediate action before the variations seriously affect both profit and delivery. The majority of construction companies have adopted software to manage most aspects of their business, including estimating, planning, link and forecasting, financial accounting, cost value reconciliation and earned value management.

Unfortunately, the majority of these have not yet identified the power and importance of having all of these functions integrated, which in turn leads to variations and over-runs taking weeks or months to correctly identify and resolve. In many instances, the items mentioned above don’t correlate with each other in any way, leading to inconsistencies during monthly reporting.

The ability to immediately identify

variances with the required accuracy and detail to take action hinges on 10 critical components: 1. Pricing new items that have not previously been priced or identified and having the ability to differentiate between original scope and variations.

2. Changing the status of the variation – is it approved, unapproved or awaiting approval? All these can be viewed by management to make the correct commercial call. Automated reports to validate the differences between original scope and change.

3. Allocating variation codes to identify new bill items which are possible scope changes or contract instructions.

4. Identifying new resources on the procurement list and updating the buying list accordingly.

5. Projecting cost integration with the planning schedule, to effectively reconcile consumption of resources in real time.

6. Organising the projected cost model to include cost and activity codes, to facilitate the required comparison.

7. Linking indirect or preliminary items directly related to the variations –very important when dealing with ‘extensions of time’ claims.

8. The projected cost model having the facility to action cost and time re-calculation based on actual rate and quantity performance, identify what is actually happening on-site and forecast revised final costs.

9. Making sure the information and data source related to actual cost is web-based, to enable input of real-time costs from wherever that cost information is captured.

10. Using matching coding structures between all software packages so that cost value reconciliation is possible.

These ten components can be found in modern, state-of-the-art construction software applications

that are leading the way in increasing profitability and reducing cost and budgetary risks in the construction industry.

These systems do come at a cost, but this pales in comparison to the true cost of over-runs, profit loss, disputes and possible damage to relationships.

Accurate identification of cost variance in real time allows cost control to occur weeks before the normal reconciliation process. These are weeks to achieve vital cost savings, to deliver more profit to the bottom line, and to reduce the risk of losses sometimes only evident at the end of a project.

When a construction team can control cost on each activity in a project as it happens, profit takes care of itself, and as a nice bonus, a financial director has the information needed to accurately project profit on multiple-year projects, in compliance with international accounting standards.

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