ME Consultant April 2021 by CPI Trade Media

JLL discusses Cairo’s residential, office and retail sectors in 2020

ON TOPIC

Arcadis on data centre trends, project drivers and challenges

IN PRACTICE

Women in Construction: NEB’s Razan Najee

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Contents | 01

April 2021 Issue 079

Cover Story

Masters of Complexity

Jason Saundalkar talks to four of Omnium International’s executives about how it tackled the pandemic, the launch of its new services and its push into new markets Opinion

Hospitality Management Hotel owners across Middle East and Africa are eyeing the benefits of third-party management as they seek to ramp up business following COVID-19 says Bani Haddad

12 Analysis

16 meconstructionnews.com

Cairo Real Estate Review

JLL discusses how Cairo’s residential, office and retail sectors fared in 2020 following the outbreak of COVID-19 April 2021

02 | Contents

Interview

Dealing in Data Centres

Jason Saundalkar speaks to Arcadis’ Natalie Sauber about the deployment of data centres in the GCC region

36 Profile

Razan Najee

Jason Saundalkar talks to Razan Najee, interior designer at NEB about her influences, career and gender diversity in the construction industry

28 Opinion

Lighting Sanitisation Drees & Sommer’s Susann Sonnenberg says the time is right for the industry to consider the implementation of effective and sustainable sanitisation lighting

8 Update

News

Key Saudi sectors eye $420bn in foreign investment; UAE launches National Integrated Energy Model; FANR issues operating license for Unit 2 of Barakah plant to Nawah Energy Company; Studio N announces completion of three projects across the GCC April 2021

18 meconstructionnews.com

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04 | Welcome

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The Art of Reinvention I’m a bit of an airplane buff and so I can spend hours on YouTube, watching airplanes take-off from airports around the world. It’s a guilty pleasure and despite the number of times I’ve flown in/out of Dubai International Airport, I still love the takeoff/ landing views. The city’s skyline makes for spectacular viewing and even when you’re watching YouTube videos, the sheer number of skyscrapers give the videos an almost 3D look, particularly when the Burj Khalifa comes into frame. The one thing I’ve always wondered about, though, is how the city would look if it had significantly more green features. The great news is, with the launch of the Dubai 2040 Urban Master Plan by His Highness Sheikh Mohammed bin Rashid Al Maktoum last month, I won’t have to wonder for much longer. The new master plan is the seventh developed for the emirate since 1960 and is part of His Highness’ vision to make the city the best in the world to live in. The headline figure is that 60% of Dubai is to be turned into nature reserves! That’s an astonishing figure and had it been any other city in the world outlining that as one of the goals, I’d think it was not achievable. Dubai, however, has made a name for itself over the years by launching and delivering April 2021

on ambitious and transformational projects, and reinventing itself to remain competitive, so I’m confident about the city delivering on its ambitions. In fact, I’ve already heard from some of you that things are already beginning to change on the projects you’re working on, in relation to this new master plan. Apart from the massive ‘green push’ (as I call it), the master plan also outlines several other interesting goals that will not only make the city more attractive as a place to live, but will also boost a number of the sectors. For instance: 168km2 of land will be dedicated to industrial and economic activities, a 400% increase in space is being designated for public beaches, and, crucially, the master plan aims to ensure that 55% of the city’s population lives within 800m from main public transport stations. The master plan also outlines the issuance of an urban planning law to support sustainable development and improvement in the city, as well as numerous integrated services. To say the master plan is comprehensive is putting things mildly, and I can’t wait to see how the city begins to change going forward. Until next time, stay safe!

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06 | On Topic

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SHEIKH MOHAMMED DECREES ESTABLISHMENT OF INHERITED PROPERTY DISPUTE TRIBUNAL

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Abu Dhabi Airports to pull MTB contractors’ bonds over project

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DEWA commissions $153m 400/132kV substation at MBR Solar Park

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Grundfos bounces back after COVID-19 revenue slump

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EMPC appoints Arab Architects to Reef Mall refurbishment

April 2021

READERS’ COMMENTS

ANALYSIS The tech to enhance collaboration and transparency

The question of inheritance all too frequently unravels the bonds of families and can leave many lives in tatters. The importance of this intervention by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and ruler of Dubai therefore cannot be overstated. The establishment of a special tribunal to resolve disputes between heirs in relation to the sale of inherited residential property provides clarity to both home owners and the real estate market in general in the UAE. The move to protect the rights and interests of all concerned parties, especially the elderly, minors, femes sole, divorcees, widows and people of determination closes a loop hole and provides protection to these vulnerable groups. The decision to move the tribunals away from Dubai Court is an interesting initiative and in many ways it is a return to the spirit of personal dispute resolutions that were conducted many years ago in Dubai. My main hope is that this will provide speed and certainty to many and allow them to continue with their lives as soon as possible. Name withheld by request

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8 | On Topic

Infrastructure

Key Saudi sectors eye $420bn in foreign investment

Energy

UAE launches National Integrated Energy Model

Saudi Arabia’s Investment minister Khalid Al-Falih has stated that the country’s infrastructure and transportation sectors are seeking to attract around $420bn in foreign investments over the next 10 years. The minister made the remarks at the USSaudi Arabia Business Leaders 2021 Virtual Forum. The two-day event was organised by the US Chamber of Commerce in Washington, according to a report by the Saudi Gazette. Al-Falih encouraged US businesses to invest in Saudi Arabia as the Kingdom offered a variety of attractive opportunities across different sectors. He explained, “Saudi Arabia is opening up multiple new industries as an integral part of the Vision 2030 transformation, including clean energy, mining, mobility and logistics, tourism and quality of life, ICT, healthcare and life sciences & biotech.” The minister also praised the role played by the G20 countries in mitigating the impact of the coronavirus pandemic on the global economy. “Swift actions taken by the Kingdom, the US, and others in the G20 have contributed to an enabling global economic and investment environment,” Al-Falih noted. In addition, he highlighted the resilience of the Saudi economy in the face of COVID-19 related challenges and said that the Kingdom has taken effective measures that increased foreign investments by 40%.

02 Along with the launch of the National Integrated Energy Model, an understanding was made to develop energy modeling capabilities with Khalifa University and IRENA.

April 2021

01 As part of the Vision 2030 transformation, Saudi Arabia is focusing on clean energy, mining, mobility and logistics, tourism, QoL, ICT and more.

The National Integrated Energy Model has been launched by the UAE Ministry of Energy and Infrastructure, in partnership with Khalifa University (KU) and the International Renewable Energy Agency (IRENA). It outlines the future of Energy for the UAE and the design of the next 50 years in the energy sector, according to the vision of the future government. It is also said to represent a roadmap for a new phase of energy sector sustainability. According to a statement, the model is important because it provides a common framework that brings together stakeholders in the energy sector. It is also said to define

meconstructionnews.com

On Topic | 9

the contours of the future, as part of the UAE’s efforts to maximise the benefits of the sector by developing strategies and foundations during the next phase, in line with the National Energy Strategy 2050. The strategy aims to obtain safe and sustainable energy at competitive prices, raise the efficiency of individual and institutional consumption by 40% by 2050, and increase the contribution of clean energy in the total energy mix produced in the country to 50%. “Work is under process on developing an energy strategy to harmonise developments in the energy sector at local and global levels. It takes into account the UAE’s orientation towards diversifying energy sources and developing the sector, finding various solutions in addition to traditional energy, in a way that supports sustainable development, national economies, and the country’s passage to the next 50 years of achievements, up to the UAE Centennial 2071,” said Eng. Sharif Al Olama, undersecretary of the Ministry of Energy and Infrastructure for Energy and Petroleum Affairs.

03 The operating license for Unit 2 of the Barakah nuclear plant has an estimated duration of 60 years.

Infrastructure

FANR issues operating license for Unit 2 of Barakah plant to Nawah Energy Company The Federal Authority for Nuclear Regulation (FANR) has issued the operating license for Unit 2 of the Barakah nuclear plant to the Nawah Energy Company. The license has an estimated duration of 60 years and authorises Nawah to commission and operate Unit 2 of the nuclear plant. meconstructionnews.com

According to a statement from ENEC, FANR reviewed the 14,000 page operating license application for Units 1 & 2, conducted more than 220 inspections and requested 59 additional pieces of information for Unit 2 on various matters related to reactor design, safety and other issues, to ensure the Barakah Nuclear Energy Plant’s complete compliance with all regulatory requirements. “This is another historic moment for the UAE, being the first Arab country in the region to operate a nuclear power plant and culminating efforts of 13 years in building such a programme. This milestone was achieved due to the UAE’s vision and its leadership to build a peaceful nuclear energy programme to cater for the future needs of energy in the country,” said ambassador Hamad Al Kaabi, UAE Permanent Representative to the International Atomic Energy Agency (IAEA) and deputy chairman at FANR. Nawah will now undertake a period of commissioning to prepare for the commercial operation where FANR will conduct around-the-clock inspections, using its resident inspectors located at the plant, in addition to deploying other inspectors, to ensure the fuel load and power accession processes are completed according to regulatory requirements, the statement noted. April 2021

10 | On Topic

Lighting

Studio N announces completion of three projects across the GCC Studio N has completed three projects across sectors in GCC countries. The firm says it has delivered low-glare downlight systems for SensAsia in the UAE, a modern lighting system for fashion retailer Moda by Nayomi in Jeddah, in addition to a practical lighting solution for Salero Bahrain. All three projects are fundamentally different but a sense of drama and ambience has been created in each space using clever lighting techniques, the firm said. On the SensAsia Spa project, the firm stated that it employed low-glare downlight systems to generate mood-enhancing lighting effects across the various elegant spaces. Commenting on the Moda by Nayomi project, Studio N said it developed a modern

April 2021

lighting system for the fashion retailer, working in co-ordination with Umdasch and product supplier Ansorg. The design concept is said to capture the modern Saudi city scene and an efficient high-output LED tracklighting system was used to accentuate the choice of materials in the contemporary interior, the statement explained. “Narrow spot beam reflectors focus the light directly on the merchandise and avoid any unnecessary spill-light, ensuring good glare suppression and a high level of visual comfort. The Studio N team wanted all eyes on the stars of the show: the clothes,” a spokesperson from Studio N remarked. Explaining the Salero Bahrain project, Studio N pointed out that it worked with designer LXA to implement an atmospheric and practical lighting solution throughout the space.

04 Studio N has delivered different lighting solutions for three projects spread across different three different sectors and cities.

Lighting

Azizi awards contract for lighting services Light Concept has been appointed by Azizi Developments to incorporate façade lighting as a distinct feature for its key developments, including Aura, Mina, Royal Bay, Aliyah, and Berton. The developer said that artistic lighting will emphasise the architecture of the developments, elevating their aesthetic presence and giving them a distinctive look. The contract comprises lighting concepts that aim to complement the surrounding environment, illuminate the buildings’ exceptional architectural features, and provide striking projections that make it beautifully unique to both see and reside in, the firm said. “We are delighted to have contracted Light Concept, the very reputable, high-calibre lighting consultant, who will now support us in adding state-of-the-art, awe-inspiring façade lighting to our prized developments. Light Concept has consistently maintained the highest standards in quality lighting and has meconstructionnews.com

On Topic | 11

Infrastructure

Qatar Petroleum awards $2bn EPC contract to Samsung C&T

worked on several world-renowned projects. We look forward to the upcoming beautifications, which will add further touches of prestige to our already-spectacular developments,” says Azizi Developments chief development officer Mohamed Ragheb Hussein. Spanning nearly 38,500sqm of built-up area, the developer says that Mina is one of the Palm Jumeirah’s most architecturally interesting and luxurious developments. It features 178 units, comprising 120 one- and 54 two-bedroom residences, as well as four penthouses. The project also comprises several retail units spread across 1,847sqm, and over 69% of its total area is allocated for lifestyleenhancing amenities. The developer said that its Berton project will also benefit from the new lighting consultancy contract and said the project offer customers the opportunity to live in one of the most up-and-coming locations in the emirate – situated in Al Furjan.

Qatar Petroleum has awarded Samsung C&T Corporation an engineering, procurement, and construction (EPC) contract valued over $2bn. The contract is for the expansion of LNG storage and loading facilities located within Ras Laffan Industrial City, as part of the North Field East (NFE) project. The contract was signed by Saad Sherida Al Kaabi, the Minister of State for Energy Affairs, the president and CEO of Qatar Petroleum and Oh Se-chul, the president and CEO of Samsung C&T. According to a statement, the contract was awarded on a lump sum basis and was the second major onshore EPC contract award for the North Field East (NFE) project. Once complete, the NFE Project will boost Qatar’s LNG production capacity from 77m to 110m tonnes per annum (MTPA).

06 Once work has been completed on the NFE project, Qatar’s LNG production capacity will increase from 77m to 110m tonnes per annum.

Earlier, the company awarded an EPC contract for the construction of four LNG mega-trains with associated facilities to the Chiyoda Technip Joint Venture. Both contracts represent the culmination of FEED work that began in early 2018. “This contract provides for the expansion of existing infrastructure required to ensure the safe loading and on-time delivery of our LNG cargoes to our international customers across the globe. Its scope includes three LNG tanks and three LNG loading berths for NFE, and options for two LNG tanks and one LNG berth for NFS project, and all associated pipes, lines and loading lines,” stated Al Kaabi. He noted that the contract is another concrete step towards the further development of Qatar’s natural gas resources, and enhancing the country’s position as the world’s largest, most reliable LNG producer. The second phase of the planned LNG expansion, the North Field South (NFS) Project, will further increase Qatar’s LNG production capacity from 110 MTPA to 126 MTPA by 2027, he concluded.

05 Azizi’s Mina project on the Palm Jumeirah spans nearly 38,500sqm of built-up area and features 178 residential units.

meconstructionnews.com

April 2021

12 | On Topic

Cairo Real Estate Review JLL discusses how Cairo’s residential, office and retail sectors fared in 2020 following the outbreak of COVID-19 In a year that saw the global outbreak of a pandemic and strict lockdown measures enforced, ‘exceeding expectations’ is not a headline one would expect to read; until the International Monetary Fund (IMF) released its October 2020 Global Economic Outlook, commending Egypt’s economic performance. The various structural reforms launched in recent years, coupled with the flexible approach to handling the pandemic by allocating 2% of the country’s GDP to support more vulnerable economic sectors and industries, mitigated the economic shock to a certain extent. This reflected on the real estate sector’s performance over the year. Asking office rents in New Cairo remained stable as high-quality space remains limited. Meanwhile, in Central and West Cairo, office landlords became flexible with lease terms, offering various incentives to retain tenants. The residential rental market recorded singledigit gains as contractions in incomes meant families put any investment decisions on hold in the short-to-medium term. While, unsurprisingly, brick-and-mortar stores are yet to record pre-COVID level sales, the growth of e-commerce in Cairo played a significant role in developing small businesses and ensuring they sustain their operations. In turn, despite lagging performance across Cairo’s hotel market, secondary markets such as the North Coast and Marsa Alam saw the addition of new hotels as domestic tourism is expected to drive the sector. April 2021

Looking ahead and while uncertainty pertains, Egypt has emerged as one of the region’s biggest transformation stories. Driven by a strong government commitment to develop the country’s infrastructure and invest in its local capabilities and promote private sector partnerships and enhance the business environment, acting as catalysts to further support the real estate sector. Residential Supply and Performance

Almost 2,500 units were completed in Cairo in 2020, bringing the total residential stock to around 162,000 units. An additional 26,000 units are expected to be delivered in 2021. In terms of the performance of stock, demand across the rental market remained resilient, especially towards the second half of the year. This actually resulted in rental increases of 8% and 5% in 6th of October and New Cairo, respectively. Meanwhile, the investment market faced downward pressure, with sale prices in the secondary market dropping 4% and 10% in 6th of October and New Cairo, respectively. We expect the demand for housing to slow down in the short term, particularly in the medium-to-high end developments, as purchasing power remains challenged. However, we remain optimistic in our outlook for Cairo’s residential market in the medium-to-long term, as the government strongly supports the sector. Various initiatives that were introduced last year in response to the pandemic, such as reducing meconstructionnews.com

On Topic | 13

meconstructionnews.com

April 2021

14 | On Topic

Cairo residential supply

162k Total stock

26k

8% Y-o-Y rental rates

2021 deliveries the interest rate and setting the lending rate at 10.25%, are likely to stimulate investments. Also, more recently, property restrictions on foreign ownership of land and property were removed. These efforts are complemented by private developer initiatives such as introducing long-term payment plans, decreasing down payments, and launching cash-back offers. Office Supply and Performance

Cairo’s commercial market saw its first office completion of 2020, with the handover of 27,000sqm of GLA in the fourth quarter. This kept the total office space relatively stable at 1.1m sqm of GLA. Just under 250,000sqm of GLA is expected to handover in 2021. From a performance perspective, asking rents in Cairo remained stable annually at $325 per sqm. While the slowdown in activity this year has pushed landlords in Central and West Cairo to become more flexible with lease rates and terms, prime rents in New Cairo remained relatively stable. In turn, vacancy rates across our basket of commercial towers increased to 10% in Q4 2020 versus 12% in Q4 2019. Despite the subdued activity in the office market, smaller fitted out units of between 100-300sqm continue to be favored by tenants, considering corporate cutbacks on operational and capital expenditure. In the short-to-medium term, we expect further polarisation of Cairo’s office market, as the supply of high-quality office space remains fairly limited and centered mainly in New Cairo. While this may hint at a slowdown and delay in activity, Egypt’s economy performed better than expected in 2020, despite the circumstances. In October 2020, the International Monetary Fund (IMF) revised its 2020 April 2021

Cairo office supply (sq m GLA)

1.1m Total stock

249k

0% Y-o-Y rental rates

2021 deliveries

economic growth forecast for Egypt to 3.5%, making it the only country in the region (MENA) to register any growth during the year. This is supported by the various liquidity, and credit-support initiatives rolled out by the government, along with progress in key reforms. These economic growth prospects and the government’s commitment to enhancing transparency, promoting market competitiveness and improving governance are expected to positively reflect on the business environment.

In October 2020, the International Monetary Fund (IMF) revised its 2020 economic growth forecast for Egypt to 3.5%, making it the only country in the region (MENA) to register any growth. This is supported by the various liquidity, and creditsupport initiatives rolled out by the government, along with progress in key reforms”

Cairo retail supply (sq m GLA)

2.3m Total stock

125k

7.5% Y-o-Y rental rates

2021 deliveries

Retail Supply and Performance

Around 71,000sqm of retail space was delivered in 2020, bringing the total retail stock to over 2.3m sqm. With most project deliveries pushed to the coming year, an additional 125,000sqm is expected to be completed in 2021. With the brick-and-mortar retail stores impacted at the start of the year due to lockdown measures and safety protocols, groceries, pharmaceuticals and other retailers in Cairo quickly developed online platforms to support their businesses and continue engaging with consumers. This reflected positively on the logistics and warehousing sectors in Cairo and facilitated their rapid growth. However, in the medium-to-long term, and given the nature of Egypt’s population, which views shopping in physical stores as a recreational activity, we expect in-store retailing to pick up. Developers are also increasing their efforts to attract footfall by introducing unique entertainment and F&B offerings to their centres. This is expected to encourage most retailers to operate through an omnichannel platform to drive sales. In terms of performance, average asking rental rates continue to increase annually between 5% and 10% across secondary and primary malls, respectively. This mostly reflects the annual escalation on lease rates rather than the actual performance of the market. Despite these increments on lease rates, landlords continued to offer rent waivers or postponements, CAPEX contributions and other incentives to retain and attract tenants. These initiatives helped maintain vacancy rates at 11% in Q4 2020, representing only a marginal increase from the previous quarter. meconstructionnews.com

Date

25 May

Venue

Ritz Carlton JBR

R I T Z C A R LT O N J B R , D U B A I , U A E

Charting the course of architecture, interior design and master planning 25 May 2021

About the

Future of Architecture Influences such as climate change, increased urbanisation, health and wellbeing, and - more recently - the outbreak of COVID-19, are challenging construction industry stakeholders to reimagine the exterior and interior design of buildings, as well as the master plans of cities. New materials and ever advancing technology have also opened up a realm of possibilities, all of which begs the questions – what will buildings and cities of the future look like and how can they better support and nurture our day-to-day lives?

Insightful

Discussions This event will bring together the industry’s leading minds to engage in discussions and share presentations, all of which you will be able to follow from the comfort and safety of wherever you are. Complimentary

This virtual summit will bring together experts to discuss trends, opportunities and much more.

Networking

Get in touch

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This event presents you with an opportunity to connect with industry decision makers and influencers. There are several ways to sponsor, from interactive live polls to session background branding, and from lead generation campaigns to presentations.

Content

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Jason Saundalkar | +971 4 375 5475 jason.s@cpitrademedia.com

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PRESENTED BY

16 | On Topic

01 Bani Haddad is founder and MD of Aleph Hospitality.

April 2021

Bani Haddad “Hotel owners across Middle East and Africa are eyeing the benefits of thirdparty management as they seek to ramp up business following COVID-19” Repercussions from any event, action or crisis - even a global pandemic - may set us back initially but can also provide the impetus for change; anything from the gentle evolution of strategy to a dramatic change of focus. For most hotel owners, the initial impact of COVID-19 in the first quarter of 2020 was devastating. Hotels were closed with barely any warning, with revenue coming to a standstill. They had no insight as to when they would be able to reopen, rendering budgets practically meaningless. In order to survive, everything about the way they operated needed immediate review. For the first time in many cases, hotel owners were drilling into their profit and loss statements, line by line, asking questions, seeking ways to save, desperately hoping to protect their assets. Suddenly, many were occupied with not just how to reopen their respective properties, but also how to operate them differently. As a result, discussions around the benefits of third party hotel management, a model prevalent in mature markets such as the US and Europe, started to ripple through the region’s investor community. Through our extensive network, this is something Aleph Hospitality has been raising awareness of for the past five years but even we were surprised to see so much demand in such a challenging time.

In Africa, where we are already established, we signed five new hotels in 2020; three in Kenya and two in Ethiopia. Word of mouth, based on our reputation, was a key driver here. We are now seeing organic growth in the market; we are taking over the management of a globally-branded five-star hotel in Rabat, Morocco, and are negotiating opportunities across Africa, with leads coming from countries such as South Africa, Rwanda, Egypt, Ghana and the Maldives. In our key target markets in the Middle East - particularly in UAE and Saudi Arabia we experienced a similar demand, enquiries this time coming to us through industry consultants and global brands. We signed our first property in Dubai last year, a Crowne Plaza that we are hoping will enter final construction imminently. We have a significant number of advanced discussions underway in Dubai and across the UAE, in places such as Ras Al Khaimah, to either take over or to manage new developments. Most of the discussions in the UAE are for conversion projects as owners look to change management company. In Saudi Arabia, which remains as much of a focus for us now as it did pre-COVID, despite the challenging restrictions on the hospitality industry, we are in negotiations for several projects, this time new developments. We have to remain forwardfocused; development on mega projects such meconstructionnews.com

On Topic | 17

as Neom and the Red Sea is continuing and we want to be a part of these. Virtual Deal-Making

While the opportunities that have come out of the turmoil caused by COVID-19 have been positive for us, we have also been limited in how far we can take these. How we do business, which has always been grounded in visiting new markets and building strong relationships with our partners, has been greatly disrupted. We have stayed safe and responsible, which means neither I nor any member of my executive team in Dubai has travelled since March 2020. Thankfully, our pre-negotiated terms and agreements are in place with all of the global brands, and has increased our potential for new deals in the remote working environment. It’s in part a result of our long-term partnership with IHG that we were able to secure the management of the InterContinental Rabat in Morocco, for example. meconstructionnews.com

For the first time in many cases, hotel owners were drilling into their profit and loss statements. Suddenly, many were occupied with not just how to reopen their hotel, but how to operate it differently”

Our five new hotel agreements in Kenya and Ethiopia were completed remotely. In one way, this is a huge achievement - a testament to our network as hoteliers with decades of experience, but also, it has been frustrating not to be on the ground with our owners. Virtual meetings and calls are efficient and useful, but they have their limits, especially in a people business such as ours. Without the face-to-face element, the human aspect is missing, and relationships cannot be nurtured in the way we would like. We needed to do business, we needed to make decisions and we needed alternative ways of working to make this happen. However, we feel strongly that we could achieve so much more, for our owners and for our growth, if only we could spend time with our partners and our future investors. We are confident that travel will resume soon and are most definitely excited to reach our full potential once it does. April 2021

18 | On Topic

01 Susann Sonnenberg, Lighting & Sustainability lead at Drees & Sommer Middle East.

April 2021

Susann Sonnenberg “Whether you are a building developer, property owner or a hotel and retail operator, the time is right to consider the implementation of effective and sustainable sanitisation lighting” The most valuable asset of a company is the health and safety of its people. During these challenging times, preventing the spread of germs has become a vital part of the building development strategy. More attention is being paid to the environmental conditions in which we operate, the usage of things, the circulation in spaces and health determinants. As communities and corporates face unimaginable economic and physiological consequences of the current pandemic, the rapid mobilisation of potential clinical tools is critical. Light has the most potent environmental influence on life and is a significant component that could reduce transmission risks in the future. By implementing safe and healthpromoting light sources, companies can lower the risk of infection in their facilities, providing a safe environment for employees and visitors. Since the first recorded influenza in history, our modern world has faced multiple pandemic-like diseases, and COVID-19 may not be the last. The concept of healing through light is not new; Niels Ryberg won a Nobel prize in 1903 in Medicine and Physiology when demonstrating the use of light as a disinfectant and treated diseases with light.

Sunlight is the most superior light source and can function as a natural disinfection mechanism. Unfortunately, sunlight’s disinfectant processes are prolonged and not fast enough to stop the spread of a virus such as COVID-19. However, short wavelengths of the Ultraviolet light (UV-C) can be deployed to reduce the impact of germs by producing unique technologies of sanitation systems which are safe for humans. An Underutilised Tool

Although light is known for its ability to significantly reduce health risks, it is often still underestimated in the design and built environment. Understanding the relationship between light and health is more important than ever and organisations that take an integrated approach to smart lighting will not only be able to provide safe and sustainable sanitisation, but can also reduce their light pollution, improve their energy efficiency and lower their operating cost. It’s equally important to ensure the safe handling of lighting where it’s already used as a sustainable disinfectant – for example in UV-C sanitisation – as it can be harmful to people if performed incorrectly. meconstructionnews.com

On Topic | 19

Light disinfection has been tested and implemented within the healthcare sector for a long time. It has shown significantly better results than traditional methods and proven to reduce 99.999% of bacteria and 90% of environmental pathogens. As we endure the continuous and unforgiving impact of the pandemic, this concept may need to be adopted by other sectors as well. Hotel and retail operators should consider implementing sanitation lighting across outlets to not only fight but prevent the spread of germs. At Drees & Sommer we advise building owners and operators on protective lighting protocols and develop tailored solutions that are in line with the latest scientific results. This empowers them to operate safely and sustainably, while being able to give their customers and employees full confidence with the right health and safety measures in place to protect them.

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Organisations that take an integrated approach to smart lighting will not only be able to provide safe and sustainable sanitization, but can also reduce their light pollution, improve their energy efficiency and lower their operating cost”

We will never be able to fully replace humans when it comes to cleaning, hygiene and sanitisation but there are more scientifically proven applications and technologies than you may think. For example, lights that filter air and that can be integrated with a building’s air conditioning to ventilate and disinfect air are available here in the region and are well-suited for offices and other public spaces. Also available in the market are lighting systems that can detect temperatures in a space or facility, which allows building owners and operators to run multiple building technologies efficiently on one system. To ensure safe and sustainable operations in hospitality, retail or commercial real estate and to be well prepared for any future health crises that may arise, this is time to consider the implementation of effective and sustainable sanitisation lighting, whether you are a building developer, property owner or a hotel and retail operator.

April 2021

20 | In Practice

Masters of Complexity Jason Saundalkar talks to four of Omnium International’s executives about how it fared in 2020, the launch of its new services and its push into new markets

01 Fernando Freitas, branch director (top left), Kieran Duckworth, main board director (top middle), Nicholas Harris, managing director (top right), Peter Westeng, chairman and CFO (front bottom).

April 2021

Omnium International has decades of experience of working with clients to realise complex and groundbreaking developments across the Middle East and beyond. As a result of this, the relationships its leadership and broader team has with industry stakeholders, and its reach via offices in Dubai, Abu Dhabi, Riyadh, Jeddah and London, the firm has been on an upward trajectory. Last year, shortly after opening its new office in London, the outbreak of COVID-19 forced the company to adapt to a new reality that took hold in the span of a couple of days. Describing the steps the firm took, Nicholas Harris, managing director explains, “Our focus was primarily to safeguard our staff - that was a fundamental responsibility. We did everything to align with the government requirements and to go beyond them where possible to provide more flexibility and access. We invested significantly in our IT to ensure that working from home could be easily achieved.” He adds, “Due to what the UAE government put in place, we were able to return to the office. In fact, we took more office space to bring people back safely. We seem to be bucking the trend – there seem to be a lot of companies working from home a year later. This is astonishing to us because as a peoplecentric organisation, we realised early on the impact, from a mental health perspective, of

having people working for extended periods of time in isolation is an issue. This is especially true for our staff who are living away from their family. So, investing in taking more office space, bringing people back, getting our sense of organisation right was a very important thing to us and central to who we are as a company.” Peter Westeng, Omnium International’s chairman and CFO has been based in the UAE for 26 years and previously guided the firm through other global challenges, including the Global Financial Crisis (GFC). Asked whether he’s noticed any similarities between the two crises with regards to the firm and the market, he states, “With the GFC we were fortunate because we were in the midst of large and complex projects such as Burj Khalifa, the Dubai and Marina Malls, where progress on the projects could not just be stopped - some projects slowed down but few were stopped. As such, we were busy during the financial crisis. Our experience of the impact of COVID-19 has been very similar and for the same reason.” At present the company is engaged on a number of projects including Ithra’s One Za’abeel and Deira Waterfront Development, the EXPO 2020 UAE Pavilion, Mobility Pavilion, Sustainability Pavilion, City Gate Towers in Abu Dhabi, Dubai Creek Harbour, the Dubai Hills Mall and several other Dubai Hills related developments, the Red Sea meconstructionnews.com

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April 2021

22 | In Practice

Development, Amaala International Airport, and many others. Here, Westeng says he has a rule that guides him and the firm. “I have my 3R’s rule: reputation, relationships and doing the right thing. These have driven me throughout my 26 years in the UAE and I’m proud to say it is firmly embedded in Omnium’s core values. I believe it has helped Omnium get through the GFC and now the pandemic. We try our absolute best to ensure that our clients are happy with what we do and that our reputation stays high.” Speaking to Harris about how the pandemic affected the firm’s dealing with clients in light of the various safety protocols, he notes, April 2021

I have my 3R’s rule: reputation, relationships and doing the right thing. These have driven me throughout my 26 years in the UAE and I’m proud to say it is firmly embedded in Omnium’s core values”

“You definitely lose something in Microsoft Teams or a Zoom meeting but, in essence, we continued working closely with our clients and being respectful of what they needed. It’s been interesting because now remote working has become commonplace and acceptable. With that strategy you could potentially reduce your office space and reduce cost to a certain extent. But, we felt that approach wouldn’t let us be what we are: a family that supports each other, and we can’t support each other as effectively when people are working remotely as we can when we are together.” Discussing what helped the firm to continue delivering work, Fernando Freitas, branch director remarks, “What helped is having an agile management team at the head office. They adapted quickly, and new and revised processes filtered down to us quickly. A few factors were key: we had strong fundamentals in our team; we were ready to deal with anything that was thrown at us; we could work from anywhere and have access to our data, so were able to continue working with minimal interruption.” He elaborates, “Our established processes made a big difference. Our team has the support system and framework in place to cope with any scenario, whether they’re working from home or the office. Those considerations are what helped the team remain on top of things. We are confident that we continue to deliver the same quality and quantity of work to our clients, and they feel the same.” Asked about the feedback clients have passed on following the outbreak of COVID-19, Harris points out, “Certain clients were receptive of us saying ‘we know it’s tough but we’re going to help and support you’. We were mindful that we could be truly collaborative and provide support to clients and now that things are starting to come back, we are getting positive feedback. Our approach has paid dividends and that collaborative approach is very much at the centre of what we do.” Kieran Duckworth, main board director adds, “That message that we put across was welcomed and we got thanks for it. And, being able to retain staff has left us in a good position now, as we kept knowledge in-house, so we can continue to support clients effectively on projects that are moving forward.” meconstructionnews.com

In Practice | 23

Building a New Icon

Omnium has experience working on a range of complex and technically challenging projects including the ongoing One Za’abeel in Dubai. Discussing the relationship the firm has with the client Ithra Dubai, Freitas states, “We have worked closely with Issam Galadari, the CEO of Ithra Dubai, for over 20 years and we feel privileged that he trusts us to guide the delivery of this magnificent development. We specialise in challenging, landmark projects. We were the sole QS firm on the Burj Khalifa; Nick Harris, our MD, was the project lead – it was a project that challenged everyone. The engineering and cost management was unprecedented, so we had to create benchmarks and guide our client and the project team through unchartered territory.” He continues, “One Za’abeel is a similarly pioneering development; it is two towers with a third one spanned between them, called the Link. The steel frame in the Link weighs 9,000 tonnes and contains more steel than the Eiffel Tower. Due to its size it had to be built on the ground and then jacked 100m into the air, so we have gained yet more experience in fantastic but technically challenging milestones on this record breaking project. The Link is the world’s longest cantilevered building - the cantilevered

portion is 66m in length, making a total length of 226m – that in itself is exceptional.” Freitas says that the strong relationships Omnium developed working on Burj Khalifa have endured and on One Za’abeel, it is working with some of the same specialists. “The steel worker is someone we’ve worked with on both projects and collaboration has been essential to reaching the key milestones. In October, we celebrated the success of lifting of the Link into its final position 100m above ground level. To keep the Link in the air we had to reinforce the structure more than we would typically reinforce a structure; it has so much reinforcement that the steel used would easily span from the North to the South Pole,” he points out. Asked about what the biggest challenge has been on the project, apart from its technical requirements, Freitas responds, “It’s keeping everyone aligned. Ithra Dubai is building a bold, ambitious and luxurious product, and it has to be world leading in almost every aspect. But at the same time, even iconic buildings don’t equal an unlimited budget; that’s the biggest challenge, creating something that is iconic and pioneering while maintaining the employer’s budget. That is what we QSs are faced with

02 The firm provided full QS services on Ithra Dubai’s One Za’abeel development since the early design competition stage. 03 The firm is working on the Amaala giga-project’s masterplan and have recently been appointed to provide full pre- and post-contract cost management services on Amaala International Airport.

every day and we work hand-in-hand with the client, constantly giving them solutions to make the buildings more efficient. We could make a small change that could have a huge beneficial impact on the whole project.” Expanding Horizons

As part of its response to changing market dynamics and sensing opportunities to add value on projects, Omnium has broadened its services offering. Commenting on Omnium Resolve, Harris explains, “One notable change is our investment in the Omnium Resolve team. The delay and dispute resolution division is not a separate business; it’s a branch within a branch. For a long time we’ve worked as quantum experts,

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April 2021

24 | In Practice

relying on the efforts of others to deal with delay forensics and delay analysis. We made the decision to invest in ourselves and now have a team of forensic delay analysts onboard. This means we can provide turnkey solutions for dispute resolution, especially to do with construction claims etc.” Going into detail about how that business has progressed since it was launched, he states, “We started with two or three people initially led by Daniel Hughes, and we’ve grown significantly which is excellent. We’re trying to be sensible about making sure we have the best skills and services within the personnel, so we’re not going to the market and hiring new people to satisfy this requirement, we’re looking within first.” “That approach is an extension of our FUTURE Programme. It means at this point, where building is down and claims are up, it’s a good direction for us to be heading in. The point at which buildings come back - and they will - there will be a return to business as normal. When that occurs, we can migrate personnel from the Resolve team back into the traditional role of cost consultancy and commercial project management.” Duckworth adds, “This allows us to retain our people and their vast knowledge. With the April 2021

use of CPD and the expert witness programme, as an extension to the Resolve services, we have the opportunity to say we are an accredited expert witness and that’s important for the development of the Resolve team.” MEC had previously spoken to Harris and group HR manager Patricia Crilley about the firm’s staff enrichment programme. Sharing an update, Harris notes, “We’re pleased and committed to the programme. We now have three graduates of the company sponsored Post Graduate Quantity Surveying Masters programme in partnership with Heriot Watt University in Dubai. I’m immensely proud of each of our graduates; they successfully balanced full-time jobs with their studies and normal life. Two of our graduates are working

04 Omnium have provided full pre- and post-contract cost management services on the Platinum LEED Terra Sustainability Pavilion at Expo 2020. 05 From cradle to grave, Omnium provided full QS services including acting as the employer’s representative on the City Gate Towers Development in Abu Dhabi’s Zayed City Area.

mums and we are delighted to have supported them through this achievement.” Coming back to the new services, Harris explains, “It’s something we’ve done before; we have provided expert witness services albeit some years ago and with the advent of Resolve, it was a natural thing for us to move back into. The other thing we’ve started getting involved in and has been very well received is Risk and Quality Management.” Duckworth elaborates, “We’re seen as go-to leaders from a number of clients. They know our capabilities us in terms of the due diligence that’s required, the traceability, the accountability of things. So, it has been a natural development into that area and another service that we’ve been asked by clients to bolt onto our traditional core business of cost consultancy.” Market Uptick?

Omnium notes that in the second half of 2020, it began to see a bit of a resurgence in projects. Harris says enough was happening to highlight 2021 as a sort of rebound year, though he notes that clients are, expectedly, more cautious. Going into detail, Duckworth says, “During Q4 and into Q1 of 2021, it was Abu Dhabi focused. There were a lot of inquires meconstructionnews.com

In Practice | 25

coming through on sizable developments with real meaning behind them. The market is going back to finish off some of the early engagement; a lot of these projects are still at the pre-concept stage and they want to nail down things, so they are a bit clearer and have the feasibility and revenues worked out.” Duckworth notes the firm has also begun venturing into Sharjah through a project with developer Eagle Hills. He explains, “We’ve worked with Eagle Hills in the past but this is the first one venturing into Sharjah and that’s a springboard for us in the emirate.” “Saudi Arabia has also started moving. We’ve had some success over Q1, with sizeable projects. That’s encouraging for us, having been there so long,” he says. Harris notes that the firm opened an office in Jeddah in 2007 and in Riyadh in 2018. Omnium has already been appointed on a number of projects within the Kingdom and Harris reckons the firm is poised to win more work. “We are already a strategic partner for Amaala and we’re excited about what is happening on the Red Sea coast and with Neom. Our KSA director Peter Nathan is a main board director and has been with Omnium for over 15 years. He’s not delivering work remotely - he’s lived and breathed the Kingdom for a significant part of his career.” “We’ve pushed this year to make sure that people are more aware of us; it’s an opportunity for our management to get over there and meet the right people and demonstrate what we have been doing and what we are capable of doing.” Shifting focus to Europe, Harris comments, “We are busy there and looking to London as our hub for European business. We’ve got two projects outside of the UK, which are looked after by our London team. We’re looking at increasing staffing in London towards the end of 2021. It’s exciting.” He elaborates, “In London we’re looking at property management. We did it in the early 90s, so we’re getting back to our business there and making people understand that we are looking to compete for work in the UK market place.” Asked about the challenges the firm faces, he notes that perceptions have to be changed. “The initial reaction is that Omnium are just quantity surveyors but it’s not as simple as that. meconstructionnews.com

We need to make it clear that the services we provide are tailored to the market where our offices are, and that we are there to help clients overcome challenges. The perception that we have a small office in London isn’t the full story because they have the backing of our group’s shared pool of resources.” Duckworth notes, “The work that Resolve does lends itself to working across markets. We were working recently in Baku through the Resolve team, so I think it’s just a natural spread of the service that they do. In Saudi, the model has often been full PM/CM management. We’re not project managers in the fullest sense, so we’ve looked at strategic partnerships, so we can form part of that delivery model. We’ve had some success with this in Q1.” Harris summarises, “We’re not just diverse in terms of client base or geography but also with the services we provide via partnerships. That will be a notable part of our strategy to increase our footprint and raise our profile. We are experienced at the full plethora of pre- and post-contract cost consultancy and QS services, and looking after bespoke and

standard construction contracts, consultancy agreements, and delivering a building, no matter what shape, size, or complexity it is. Our focus is complex and challenging projects because that’s what we deliver, that’s what our portfolio is - those landmark developments that haven’t been done before. The way they are managed and developed is naturally pioneering, so we needed to be forward thinking to provide the right services to our clients, so we can deliver the projects that they have.” Here, Westeng points out, “One of our goals is to retain our staff because that is where the knowledge and project experience is. We’ve got a large team here; a good 40% have worked for Omnium for more than five years, 15% for more than 10 years and several of us have hit the 25year mark. I strongly believe that this retained knowledge and experience is our strength” Closing on a note of encouragement, he states, “Dubai is always evolving, work with challenges and evolve as the situation demands and encourage teamwork. Projects where the client, the consultants, and contractors all work together, they are the successful ones.”

April 2021

28 | In Practice

Dealing in Data Centres

Jason Saundalkar speaks to Arcadis’ Natalie Sauber about the deployment of data centres in the GCC Following the release of the Arcadis Data Centre Location Index, Jason Saundalkar caught up with Natalie Sauber, Market Intelligence lead at Arcadis to discuss data centre trends, project drivers, regional challenges and more.

growing importance of new developments in data centres. As these are global issues, they also impact GCC countries to a certain extent. What will drive the deployment of data centres? Has COVID-19 had an impact on the progression of this sector?

What are some of the current trends in the data centre market in the GCC?

01 Resilient data centres are more important than ever before due to a surge in data consumption driven by factors including the outbreak of the COVID-19 pandemic.

April 2021

GCC countries have witnessed significant growth in recent years and, with that growth, countries are looking to improve their digital economies. The data centre market in the Middle East is still at the early stages of development, with only a select number of data centres available. However, increased government support for the digital economy coupled with growth in cloud adoption and smart city initiatives are further emphasising the importance of data and storage, and we expect to see an increase in developer interest in new projects. Initiatives such as the UAE’s vision for the next 50 years and Saudi Vision 2030 are likely to aid in the growth of cloud, big data, and IoT services. These smart city initiatives highlight the importance of data in improving communication between residents, cities, electronics, automobiles, and devices, thus boosting the data centre market growth. In addition, three of the most significant current issues impacting the data centre market globally are efforts to reduce carbon emissions to address climate change, the continued effects of the COVID-19 pandemic, and the

An increased demand for cloud computing, big data and IoT technologies will be a predominant driver for data centre development in the Middle Eastern region. The investment in the market is further driven by telecommunication, enterprises, government, cloud and colocation service providers. The COVID-19 pandemic has led to a massive surge in internet traffic, largely driven by the various lockdowns that governments have put in place to drive down infection rates. It has led millions of people to work from home who are using digital means to purchase goods and services, and for social and entertainment purposes. Though this trend was well underway before the pandemic, COVID-19 has accelerated the advent of the digital economy. The surge in data consumption has put a significant strain on fiber networks and data centres, and it highlights how important it is for data centre operators to build resilient facilities, as data centres have become critical societal infrastructure. As a result, developers are trying to accelerate construction of new facilities to meet the increased demand. At the start of the pandemic, there were fears that COVID-19 would have a lasting impact on global supply meconstructionnews.com

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April 2021

30 | In Practice

chains and would increase costs. So far, this has not been the case, as supply chains have proven to be resilient and the negative effect on data centre construction was short-lived. Over the last few years, the UAE has been directing significant resources toward the digitalisation of its infrastructure resulting in long-term plans such as the National Innovation Strategy, the Artificial Intelligence Strategy 2031, and the Blockchain Strategy 2021. These certainly laid the groundwork for the country’s swift, efficient, and resilient COVID-19 digital response. What challenges may get in the way of data centres taking shape in the UAE? How can they be overcome?

To date, there is no international consensus on data privacy and sovereignty, leaving countries to decide for themselves on how lenient or strict the relevant privacy and data-hosting laws should be. Unlike Europe, where a drive to protect data has led to the implementation of EU-wide GDPR regulation,

April 2021

02 Natalie Sauber is Market Intelligence lead at Arcadis. 03 The United States, Singapore, Japan, Sweden, Norway, Denmark and the UAE have been named as the top favorable markets for localisation in Arcadis’ Data Center Location Index 2021 report.

the UAE government has not yet implemented a specific data protection regulation. Instead, protective measures are provided under a broader regulatory environment including the regulating Telecommunications Law, the Cyber Crime Law and certain clauses within the Penal Code and Constitution, to maintain strict control over data. Given the speed of change in the market, there can be benefits of having legislation that is specifically designed to deal with the many challenges that can arise. Another challenge is the weather, specifically temperature and dust, which can place severe demands upon the efficiency of data centres. This relates to large cooling

units and the need for very good and wellmaintained air filtration. As a consequence, investors are now demanding innovative and cost-effective cooling techniques to counteract high development costs. Linked to this, of course, is the drive to net zero carbon buildings, including data centres. Furthermore, the maintenance and repair of data centre units also needs to be considered since the majority of units are imported making any future maintenance comparatively more expensive. Availability of spare parts and the supply lead times are also mitigating factors. A robust supply chain which holds these critical components can solve this specific challenge. What are some of the key considerations in the planning stage of a data centre? How important is the design of the project and its location?

The very first step is deciding where to place the new data centre. This is where companies need to understand countries’ markets, as well as regional differences within countries in terms of the availability and reliability of electricity, the status and availability of fiber optic networks, the regulatory and permitting regime, and many other factors. Savvy due diligence conducted at this stage is essential to making informed decisions that can maximise return on investment across the entire journey. Once a data centre operator has decided where to place the new facility, they enter the planning phase. At this point they must decide how, and on what time schedule, they will design the new facility, secure all of the necessary permits and permissions, engage with a multitude of suppliers and service providers, have the facility built and outfitted and begin operating the data centre. During this stage, companies will have to decide on the basic parameters of the new data centre; for example, roughly how large it should be based on the desired use and other business objectives. It is important to note that this stage is also critical in terms of designing the long-term sustainability and resilience of the new data centre. This is where companies can make decisions that can reduce the embodied carbon of the new building and outfit the asset with sustainability features, which can reduce meconstructionnews.com

the amount of embedded carbon and energy that will be used over the life of the facility. It is critically important data centre operators maintain highly competent due diligence efforts throughout this phase to help avoid unforeseen costs or delays. This is also the stage at which project, cost management and long-lead item procurement efforts work together in unison. Data centres have significant power and cooling needs. What can be done to offset these requirements and make the project a little more eco-friendly?

One way to approach this challenge is by actually raising the baseline temperature inside the data centre, which can save money by reducing the amount of energy used for air conditioning. As such, the operating environment inside the data hall can be addressed to ensure it is operating at ASHRAE upper limits and the hardware is ‘hardened’ to withstand higher operating temperatures. Some data centre operators have resisted this strategy fearing this would lead to more hardware failures. With continuous improvements to server technology this claim is largely unfounded; Google has even increased its data centre temperature to 27 degrees C. Often data centres are not run anywhere near capacity, so the right sizing of infrastructure and monitoring of the internal environment can also help to generate savings. From what we see in the market, the majority of Middle East countries do not support the use of free cooling systems and meconstructionnews.com

The surge in data consumption has put a significant strain on fiber networks and data centres, and it highlights how important it is for data centre operators to build resilient facilities, as data centres have become critical societal infrastructure”

important, as the data centre market is getting more competitive. At the same time, we see that societal expectations and sustainability need to the be incorporated in new data centre designs to reflect the changing market. There are a few missteps that can be avoided. Firstly, work out how likely permit success is going to be and what the sequences and timings in the permitting process are. Many projects come unstuck here and are delayed or lead to significant changes in site design. Another potential misstep is to assume that the climatic or other environmental conditions are similar to those cooler or wetter locations. The high-level design requirements should be thought out before launching into the full design process, so that the complete site can be coordinated well. Make your closing remarks.

lean more towards water-based cooling systems. Through the deployment of artificial intelligence and machine learning workloads in IoT and big data environment, direct liquid cooling and immersion cooling solutions are likely to witness high adoption in the region. What learnings can Arcadis bring from other markets to projects in the region? What are some of the missteps you’ve seen and how can those be avoided?

Speed to market has always been the overriding factor in the data centre world. Nowadays, speed remains important, but cost of development is becoming increasingly more so

We are excited about the prospects for the data centre market across GCC countries and think it offers large long-term opportunities for the economies. At Arcadis, we’re currently working with some of the biggest co-location centres and hyperscale data centres around the world. Our portfolio of work reflects our deep understanding of the broader business and technology issues at play, as well as the unique challenges and goals of our individual clients. More than that, our projects reflect our dedication to innovation: not only do we provide solutions that save money, increase energy efficiency and provide greater reliability, but we also offer better ways to achieve those objectives. April 2021

32 | In Practice

PUBLIC-PRIVATE PARTNERSHIP -

THE SHAPE OF THE FUTURE? Middle East Consultant attended Cundall’s recent webinar, which shed new light on the benefits and potential hazards of PPPs April 2021

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In Practice | 33

On 17th March, Cundall hosted a webinar around the theme ‘Why adopt a PPP procurement pathway?’ Bringing together six acknowledged industry experts, the session tackled critical questions about the advantages and drawbacks of Public-Private Partnership (PPP) and the procurement factors most critical in its effective set-up. While used internationally for several decades, the PPP instrument is relatively new within the GGC, where its use has typically been limited to infrastructure projects. So the debate - the first of a series of four to be led and hosted by Cundall - covered topics that are all too infrequently discussed in the Middle East and for which the only precedents are to be found in international markets. But first things first. What exactly is PPP and why did it come about? A Public-Private Partnership (alternatively known as a PPP, 3P, or P3) is a co-operative arrangement between government(s) and business(es) that work together to complete a particular project, which can either be a stand-alone or feature a range of complex linked projects. PPPs first came about in response to the United Nations Sustainable Development Goal 17, which aims for a development model where ‘multi-stakeholder governance’ is key. The first PPPs came about in the UK, Germany and Denmark in the late 1980s; and while they have often focused on infrastructure projects such as building and equipping schools and hospitals, creating transport systems, and water and sewerage systems, they are now increasingly important for large-scale housing, and prestigious projects such as conceiving and building a national technopolis or a ‘smart’ city. It’s interesting to note that the UAE government’s own website explains: “The PPP model would serve the UAE’s goals and agenda in implementing a sustainable, competitive-economy based on knowledge, expertise and diversity. It would serve the public interest from the integration of efforts, fund, expertise and technologies of both the government entities and the private partners. In addition, it is an ideal option to render efficient commodities and services at a lower meconstructionnews.com

cost and to make use of the private sector’s capabilities and efficiency.” It’s worth mentioning that the two additional benefits of PPP are its ability to attract national, regional and overseas investments via ‘glamorous’, high-end developments; and the cost saving that can be achieved on the project’s operation and maintenance because of the competitive bidding and the innovative technologies likely to be offered by private tenderers. There are also many ways in which the PPP ‘deal’ can be structured and the style of relationship that’s at stake. It might involve a full-scale build, operate, transfer (BOT); a build, own, operate, transfer (BOOT); or build, own, operate (BOO). Yet it can equally well be something as simple as a purely service contract, or a management, leasing or concession agreement.

In PPP, you can’t just ‘build and walk away’. The private sector must stand behind what it’s created. Part of the innovation remit is the fact that private companies are subject to intense competition - and this can mean innovation not only in terms of design and concept, but a commitment to structures that stand the test of time better than ever before”

With that said, Cundall’s event brought together the views of: • Catherine Workman, partner, Pinsent Masons • Jim Lambrianidis, project director, Plenary Group • Yvon Mompeyssin, head of Strategic Development, ENGIE • Jonathan Stewart, head of Public Sector, Gleeds • Caimin McCabe, director, Cundall The event moderator was Richard Stratton, partner and managing director MENA at Cundall. The Importance of Risk Transfer

One of the key benefits of the PPP model is that it exemplifies the appeal of ‘risk transfer’. As Catherine Workman describes: “PPP is really all about the transfer of risk - the risk lies with the party best able to manage it. It’s this factor that has always been so appealing to governments commissioning these projects: the public sector sets the goal and the private sector then decides how best it will be met. Due to this, PPP then becomes a very competitive way to create infrastructure - for example, the PPP arrangement is actually ‘off balance sheet’ for the relevant country, while the cost is financed by government Gilts. This is a much cheaper way of borrowing money than anything available to the private sector.” Jim Lambrianidis explained a different aspect of the risk equation saying, “Investors and developers take a ‘fitness for purpose’ risk; by this I mean that they have to ensure that what is built will fit the relevant output specification. This in turn puts the emphasis on quality of service, so that the expected standards will be met consistently and there is communication throughout. This is where, for example, in PPP the maintenance dimension is so critical - the project as a whole must be kept in good condition, so that there is no risk of it falling short of the agreed criteria. Again, this is a very positive feature of risk transfer away from the commissioning agent.” He added, “All in all, PPP projects have a longer risk profile and parties can look at how they can best deliver that risk and amortise it across the given timeframe.” April 2021

34 | In Practice

Jonathan Stewart noted: “While all of this is true, let’s not forget that, as Jim has said, PPPs very much put the emphasis on communication. It’s key! Who is responsible for what? We have to know that in order to understand whether each party is talking an appropriate risk that they can best carry. This is only possible if there is a well-written and clear brief. It should cover design and service requirements - but it also has to say precisely how the public sector will pay the private sector. Remember, we can be talking about very long timeframes here - as long as 25 years - and it’s critical that the payment stream can be consistent despite the inevitable changes in federal government.” Yvon Mompeyssin comments, “The public authority needs to be crystal clear about want they want to achieve and this needs to be aligned throughout all the project documentation. In my experience, two factors are critical. Firstly, the sustainability of the project. This can mean either the economic sustainability over the whole life of the project (which may be up to 50 years in extreme cases!) and then the eco-friendly sustainability, where

02 PPPs are attracting interest in countries as diverse as Saudi Arabia, Vietnam, Namibia, Saudi Arabia and Rwanda and Dubai. 03 Richard Stratton, partner and managing director MENA, Cundall.

new technologies can be introduced and change the whole equation over time.” “We also have to keep in mind the role of Regulation. This cannot be improvised; all the regulation has to be followed and its requirements put in place properly, because there’s no better guarantee of future disputes if it isn’t.” The Appeal of Innovation

PPPs very much put the emphasis on communication. It’s key! Who is responsible for what? We have to know that in order to understand whether each party is talking an appropriate risk that they can best carry”

What about innovation? So often, we hear that the tendering businesses in PPPs will be fighting for the most innovative solutions that will not only win the contract but ensure that they make good profits from delivering it. Caimin McCabe remarked, “There’s no doubt that PPPs do give a good opportunity to showcase innovation. Studies in Australia, for example, show that this innovation can yield real commercial advantages - there is an 11% cost benefit from a constructional viewpoint. We also see how radical technologies and fresh approaches can be adopted that might be overlooked (or simply never considered) in more traditional models.” Stewart believes that innovation is only one advantage among many for the public sector. For

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be aware that they can challenge every aspect of the brief to arrive at the best possible solution. They shouldn’t stick passively to the public sector solution exactly as it’s stated.” The Bigger Picture

example, “in PPP, you can’t just ‘build and walk away’. The private sector must stand behind what it’s created. Part of the innovation remit is the fact that private companies are subject to intense competition - and this can mean innovation not only in terms of design and concept, but a commitment to structures that stand the test of time better than ever before.” Advantages for the Private Sector

“For the private sector”, comments Lambrianidis, “the PPP offers a tried and tested procurement process. One that brings experts to the fore, who understand what can and can’t be delivered across the magnitudes of scale, and who are prepared to pay accordingly.” For Workman, the private sector benefits because “there is a commonality of interest in getting an asset properly delivered through a balanced risk allocation. If this isn’t present, it will inevitably lead to delays later on.” Mompeyssin feels that “one of the main opportunities is job creation. There are more jobs in fields such as engineering and finance. There is also the advantage that modern PPP projects are putting more emphasis on ecological sustainability, so there are fresh opportunities for providers and specialists in this sector. However, the picture for the private sector isn’t always so rosy: poor risk meconstructionnews.com

allocation is a key risk. In the procurement process, we’ve seen the selection of a private entity based on entirely the wrong criteria - eg, they may be the cheapest, but can they deliver the job and adequately carry the risk?” McCabe notes: “You’ll rarely see a PPP brief that doesn’t challenge the private sector much more than a standard project brief would. A classic example here is that it may include the need to observe performance standards that won’t actually come into effect for another five years!” Relating to this, Stewart believes that another danger for the private sector is not fully appreciating and managing the risks and, through commercial pressure, signing up for things they cannot deliver. As Lambrianidis puts it: “Every private sector company has to ask if it can manage its scope of work. Plus, can it afford its debt financing up to the end of physical construction? If it can do this, the debt can then be re-financed and the cost of money will be much less because the high-risk phase is complete.” There is also a real risk that the private sector won’t go far enough in pushing for the right, realistic terms and financial remuneration, believing that the requirements of the tender are final. But as Stratton explains, they’re not: “Private sector companies need to

What about some of the overall benefits of the PPP model and what it’s capable of creating? After all, the much-vaunted power of the P3 as a ‘nation-building’ tool is currently spiking interest in countries as diverse as Saudi Arabia, Vietnam, Namibia, Saudi Arabia and Rwanda, and in Dubai PPP is the basis for developments such as the Dubai Metro, the RTA’s Union 71 project and Phase 1 of the Dubai Water Canal. Workman argues: “For the nation concerned, the PPP procurement model generates economic stimulus and GDP growth. Figures show that a 1% growth in infrastructure stock equates to a 1% growth in GDP.” Mompeyssin concurs saying, “With PPP, we are moving from a short-term cost system to a life-cycle cost system, with all the larger implications that will have.” Meanwhile, for Stratton, a key advantage of PPP - especially in the Middle East - “Is how it’s noticeably improving the quality of building stock, particularly in terms of maintenance and medium-term performance.” Yet there are points to note if we are to capture the advantages and not the potential downsides. For example, the role of government in acting correctly is all-important - “Governments”, as Lambrianidis observes, “tend to think that all their problems can be solved with a PPP as if by magic. But they need to put money on the table to build and operate the project. The history of PPPs is littered by examples of governments who didn’t do this when they really needed to.” McCabe argues, ‘A PPP arrangement is not a simple ‘design and build’ project and none of the parties should ever see it as such. We need to work together in clarifying the real scope and the real responsibilities from day one.” Workman concludes, “A poorly-prepared project is a waste of money for everyone - and the real shame of that is that the delivery of infrastructure so often depends on a good PPP. In fact, sometimes, without one, it won’t happen at all.” April 2021

36 | On Site

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Razan Najee “Employers need to forget gender and rather look at the talent that the person is bringing to the table - this is what they should be paying for” Following our special edition dedicated to women in the construction industry, Middle East Consultant continues to share the inspiration and experiences of women working in the male-dominated industry across the GCC. Here, we catch up with Razan Najee, interior designer at National Engineering Bureau (NEB). What drove you to get into construction and your first role in the industry? What were some of the influences that set you on your path?

Apart from my father being my number one supporter and role model, I’ve always wanted to be a designer. Whenever I used to travel around the world, I would always be fascinated by hotel lobbies or any place we would visit. I would always be eager and curious to know about how things were built or executed. I have always had that curiosity in me which I guess helped in shaping my personality as a designer. With regards to projects, I’ve been lucky enough in NEB to work on multi-disciplinary projects starting from small scale residential, all the way to commercial and education. meconstructionnews.com

Share a brief about your career, mentioning key achievements with regards to your role.

Being an interior designer at NEB in which our firm is a full-on consultancy in terms of architecture, structural, MEP, interiors, contracts & tendering, project management and site supervision, we tend to work as a team and design buildings from scratch all the way to final completion. On these projects, I’d be involved with creating the conceptual narrative all the way to seeing the project handed to the client, which is a really great opportunity. We tend to work as a full team that delivers a full product rather than taking just a part of the process. With regards to key achievements, it’s hard to choose one, as I always see all projects as an achievement regardless of scale; every project in an achievement in a way or another! Besides fairness and being the right thing to do, diversity in the construction industry is important because of the value women can bring to employers, clients and customers. How have you made your mark in April 2021

38 | On Site

the industry working on projects and what is your proudest moment?

To be honest, we as women tend to look at things in a different manner - we tend to be more detail oriented in a way. Speaking about myself, I tend to look at every single detail of the project regardless of how big or small the project might be, which is something clients really appreciate. I was recently involved in a project for the public transportation sector that I was the only lady in the full design and supervision team - I was literally the only one! However, in that project we faced a lot of challenges with the clients and contractor to make our vision come true in terms of budgeting and the time frame. Nonetheless, I kept on pushing and trying until we reached common ground that made all parties happy and the design came to life in the exact way we wanted it to, which the client truly appreciated. If the client is happy, then I’m happy. What are some of the barriers to women entering the construction industry? What was your personal experience?

I honestly don’t like seeing or assuming there is a barrier for what women can achieve. When thinking about it, if we keep on saying ‘oh there’s a barrier’ then we will actually make that barrier happen. Women have literally reached space, so why would there be a barrier for us on earth? I highly recommend that we should think about it openly and freely. Nonetheless, the only barrier that some people would see is that we are few, since it is a male dominated field. Nonetheless, it’s an opportunity for us to shine being a few!

The GCC construction sector is still male dominated, however diversity is beginning to increase. If you agree with the above statement, comment on what is driving this and how you see the GCC markets changing in the coming years? If you do not agree with the statement above, please share your thoughts/views of the market.

Frankly speaking, the construction sector is still male dominated around the world not only in April 2021

01 Razan Najee has worked on a number of projects through her time at NEB including the 7 Pearls Residential Complex.

the GCC. However, we are very fortunate in the UAE that the government and the leadership have been really focusing on this topic, as we see summits such as the Global Women Summit, as well as councils such as the UAE Gender Balance Council, and the work of the amazing Dubai Women Establishment, which is led by Her Highness Sheikha Manal Bint Mohammad Al Maktoum. Change is surely happening, if not today, then definitely tomorrow. The UAE has become the first country in the region to issue binding legislation mandating women’s representation on the boards of government institutions. Hence, I see all construction firms in the private sector following suit soon enough. meconstructionnews.com

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In your opinion, what is the biggest challenge women in the construction sector face in GCC countries? How can these challenges be addressed?

Equal pay, I would say. Employers need to forget gender and rather look at the talent that the person is bringing to the table - this is what they should be paying for. In doing your job, what sort of discrimination (if any) have you faced and how did you/employer address it?

I fortunately have never faced any discrimination at our organisation. At NEB we also have this rule in which we have flexible working hours for working mums. This is really a plus, as we understand the importance of having this balance. Do you feel there’s a limit with regards to how far you can progress within NEB?

I would say sky is the only limit - if there is a will, then there is always a way. How does NEB approach diversity in the workplace? What more can your firm do to increase diversity?

Everyone has a part to play in diversity and equal pay. What would you like to see government authorities and construction

Women who are in the workforce - everyone should look at this topic with an open mind. We all need to change, then we will see change happening around us.

firms do to increase diversity and

The number of women in our firm has been increasing significantly over the years, which is great to see as a first step. We also have a female site engineer named Alphya Zereene and she is a great inspiration for us all. She has always been supported by the management team and we always look forward to working on projects that she’s involved with, in the supervision team - her sense and attention to detail is just superb. How do you personally push for diversity and equal pay in the construction

make pay a level playing field?

As a woman in the industry, what

sector? Are you involved in any

There has been a recent memorandum by the government for equal pay at the government sector and I would like see that happen in the private sector as well. I’m very positive it will happen going forward.

has your experience been working

groups/councils etc. that focus on

in the GCC construction sector?

increasing diversity and equal pay?

If you have worked in markets

I’m not engaged in any council; I think that we as women should uplift each other. I believe this is the way to make the change.

outside the GCC, how does your experience here compare with what you’ve experienced and

Besides authorities and

observed in other markets?

What advice would you give

construction firms, who else can

So far, my experience has been in Dubai only, and it has been fantastic. I look forward to growing more and more.

to a woman entering the GCC

play a part in increasing diversity and balancing pay scales? meconstructionnews.com

construction industry today?

Just go for it – if there’s a will, there’s a way! April 2021

40 | On Site

01 Gabriella De La Torre is a director at CBRE.

Gabriella De La Torre “Dubai’s focus on quality of life, education, healthcare etc make it an attractive destination to live, work and play” It highlights the forward-thinking nature of the Dubai Government and is further backed by the success the emirate has witnessed in economic development since the first master plan in the 1960s. This forward-thinking nature and successful track record are expected to further support business confidence in the emirate moving forward. What will be critical in attracting companies and foreign investment will be the integration and implementation of the master plan in conjunction with the range of economic initiatives and reforms which have been announced over recent years, such as the retirement visa, 100% foreign ownership and others. These initiatives, coupled with continued focus on residents’ quality of life, will play a pivotal role in supporting economic growth. Attractive Market for Companies?

Dubai’s 2040 Master Plan is expected to create a wide range of economic opportunities within Dubai moving forward and as the plan is implemented. Further enhancing and developing the city’s transport and social infrastructure, such as schools and healthcare facilities, is a central focus of the transformational plan. Companies which can assist in delivering these requirements will be well-placed to benefit. As these projects are delivered, naturally there will also be opportunities for both local and international operators of these new facilities. April 2021

There are numerous factors which influence business and economic activity, two of which are front and centre in the 2040 Master Plan – infrastructure development as well as talent pool development and attraction. Dubai benefits from world-class infrastructure as it is, however, the continued focus on enhancing this infrastructure and integrating new technologies serves to support future business needs and creates opportunities for new companies and business models. Similarly, having access to top talent is a major consideration for all businesses. Through the continued focus on quality of life, as evidenced in greater dedication of

space to healthcare and educational facilities, enhancements to the public realm and provision of new leisure and tourism activities, Dubai is poised to enhance its attractiveness as a destination to live, work and play. The plan also highlights tourism & leisure, logistics, technology, and other knowledgebased sectors as central drivers. We expect that along with the master plan, there will be a range of other initiatives to further support investment and growth in these sectors. Importantly, there is also a large focus on sustainable development and enhancing quality of life. These elements play a key role in attracting and retaining top talent. More direct economic benefits are expected from the strengthening of Dubai’s place as a leading financial and tourism center in the region. The importance of the financial services and the classification of Downtown and Business Bay as the financial heart of the city is a clear continuation of the existing success of DIFC for instance. Tourism is expected to gain in momentum and become an increasingly important economic driver for the emirate, leveraging on existing assets (sun and sea offering in the JBR / Marina area) and developing a new strategy for the 2020 Expo area (focusing on international events). Tourism is known as a great employment generator as well as an industry with significant impact on many other sectors. Hence, we expect this focus on tourism to bring important economic growth of the emirate. meconstructionnews.com

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